Argentine Bonds Could be Worth Only 30 Cents on the Dollar after a Default

By Tyler Durden | 27 August 2019

ZERO HEDGE — It was just days ago that we reported on PIMCO’s investment in Argentine bonds taking a major haircut due to the country’s collapsing currency. Now, it looks at though more pain could be on the way for investors who were savvy enough to participate in Argentina’s “growth  opportunity” by buying the country’s bonds during the turmoil the country has faced over the last 2 decades.

It hasn’t even been two years since Argentina sold a $2.75 billion, 100 year bond and already another debt restructuring is a possibility, according to Bloomberg. After President Macri lost the primary election, analysts from firms like Citigroup and Bank of America are saying that investors may only recoup less than 40 cents on the dollar on these bonds if Argentina has to restructure its debt for the third time in two decades.

Bonds seem to be already anticipating this turmoil, trading close to those levels last week. The notes traded at 45 cents on concerns that Alberto Fernandez and his running mate, former President Cristina Fernandez de Kirchner, would roll back Macri‘s market friendly agenda. Yields on the shortest term dollar bonds outstanding eclipsed 50% and assets have had a mild rebound since. However, the implied probability of a default over the next five years remains at 83%. […]

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