Buenos Aires Province May Be First Test for Argentina Debt Talks

Bondholders are gearing up for a nasty fight as Argentina’s largest province stares down a debt payment it may not be able to make, Bloomberg News reported. The Province of Buenos Aires will owe investors $571 million in January, and is unlikely to be able to come up with the cash amid a sharp devaluation in the currency and severe economic recession. The region has few dollar-generating industries, and tax revenue has dropped 14% in inflation-adjusted terms this year. Refinancing isn’t a realistic option amid plans by the federal government to restructure its debt. To make matters worse for bondholders, their adversary in any restructuring talks will be Axel Kicillof, who takes over as governor Dec. 11, a day after his left-wing ally, Alberto Fernandez, assumes the presidency. Read more