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. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
OPINION

Argentina’s time for decisiveness

Growing concerns about another default need to be assuaged quickly by the government.

Falling bond prices. Speculation over a currency devaluation. Locals rushing to the bank to buy dollars. There’s a horrible sense of déjà vu about Argentina as some investors believe the country could default on its debt for the second time in less than a decade.

One banker reckons the market is now pricing in a 35% probability of a default on hard-currency debt. Argentina’s bond prices have lost one-fifth of their value since president Cristina Fernández de Kirchner took office in December. The sovereign’s risk premium is at its highest in three years, according to Bloomberg: Argentina’s five-year CDS is trading at 618 basis points over swaps; its five-year dollar debt is trading at 950bp over US treasuries; its inflation-linked peso bonds due in 2033 are trading at 980bp over US Tips.

There are other numbers to worry about. Public-sector debt stands at $150 billion – the same level as when the sovereign defaulted in 2001. And although the level of debt that the government needs to service this year is only $3.5 billion, that rises to $10 billion in 2009, according to think-tank Inter-American Dialogue. That amount might require the sovereign to issue a Eurobond for the first time since the debt default – a task that might be highly risky given that there are investors still intent on making claims against the government after the previous debt restructuring.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

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