The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Argentina's messy debt exchange

Ingeniously structured from a legal point of view, Argentina's debt restructuring begins with what is effectively a domestic bond swap. If you are a bondholder, though, the pricing doesn't look as clever as the structure. And looming on the horizon is the threat of exit consents and the worry that Argentina will not countenance an abandonment of the fixed peso-dollar exchange rate.

Argentina has embarked on the biggest bond default in history, and for all the country's attempts to do so in a transparent and orderly manner, the process is not looking very pretty so far.

A comprehensive Argentine debt restructuring has been a question of when rather than whether for some months. And as far as rating agency Standard&Poor's is concerned, at least, the key date was November 6. That was when the sovereign announced that it was going to swap its outstanding bonds for new loans, issued under Argentine law and collateralized by tax receipts. The new loans have lower coupons than the bonds, are illiquid, and have extended maturities, although the principal is unchanged.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to Euromoney.com and Asiamoney.com analysis and receive expertly-curated updates direct to your inbox.

 

Already a user?

Login now

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree