Argentina’s down fall
According to Bloomberg blog, it is known that if Argentina makes the long awaited return to the international market bond then them nation could count on highland capital management LP to be one of the buyers. This is asset management firms that oversee over 19 billion dollars including the credit hedge funds and emerged in the marketing credit funds. James Dondero the president and co founder of highlands which is based in Dallas is pairing its holdings over the past six months. The firm has been one of the biggest holders of Argentina’s 4billion dollars notes which are due in 2033.
According to highlands plan there is a good sign of Argentina as the country to attempt and sell it at unpredictable amount in order for them to pay for the settlements without holding out any creditors led by billionaire Paul Singer. Highland company also suggests that the so called stressed out debt investors who pulled into Argentina could also remain to be buyers of the country’s debt even after the default. James Dondero said that they plan to hold on whatever that has in the original bonds but they will be looking forward to buy more for the new issuance.
It is therefore recognized that the government will issue the debt under the New York law that expects yields to fall to about 6 percent in a short term rating. This will therefore upgrade on improving the outlooks for the countries fiscal and monetary situation. Highland has been one among the biggest winners when United States district judge Thomas left a ban that prevented the country from paying its restricted debt. The firm purchased the 2033 bonds in June of 2014. This was done when they were trading in the 70s.James Dondero said that the aim of the company is to pursue investment opportunities in the country beyond sovereign of debt and that may look to start a fund in Argentina.
Like highland the other holders of the nation have defaulted in reinvesting in Argentina after they are paid. This is according to bank of America corp. the expectation of the investors will be exiting them complete and may instead see many funds creating dedicated Argentina funds to invest in debt. This will either be done with equity or even in a private equity. It is therefore known that the new bonds if priced correctly would be just another asset for providing potential upside compared to the alternative Argentina assets.