Fine Print on Argentine Bonds Becomes Crucial as Default Looms

As Argentina careens toward a default, investors are paying a premium for bonds that they think will give them more negotiating power, Bloomberg News reported. They’re delving deep into legal rules governing the securities, searching for language covering collective action clauses that come into play when borrowers want to change contract terms, as in a restructuring. Notes that require a higher percentage of investors to sign off on any deal often trade at a premium of about 25% over those with a lower threshold. Bondholders have good reason to think the issue will soon be in play. President-elect Alberto Fernandez says Argentina needs debt relief to make its finances sustainable, while signaling he’s hoping for a fairly friendly restructuring to push back payments on the bonds. Read more

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