Argentine Bonds Fall After Us Court Ruling

[camberiu]

So, we might have a bond default after all, by the way things are going.


NEW YORK, March 1 (IFR) - Argentine debt prices sank this week after arguments in a US court Wednesday appeared to put the sovereign at the losing end of its battle with holdouts and raised the prospects of a technical default in coming months.
"My read of the hearing is that Argentina got spanked, badly," said one legal academic present in what was described as a packed courtroom.


Argentine bonds fall after US court ruling

 

[Joe]

March 31st is D-Day in Argentina.

D as in "Default". March 31st is when the next payment is due.

And D for big Dollar restrictions coming into place. You can kiss your Xoom goodbye!

 

[ajoknoblauch]

March 31st is D-Day in Argentina.

D as in "Default". March 31st is when the next payment is due.

And D for big Dollar restrictions coming into place. You can kiss your Xoom goodbye!

Of course. The obvious way to pay your foreign currency debts is to prevent foreign currency from entering the country.

 

[Jaredberryman]

So, supposing they have to pay the bondholders...for us ignorant folks, what exactly is going to happen??? That definitely does not look good.

 

[Joe]

So, supposing they have to pay the bondholders...for us ignorant folks, what exactly is going to happen??? That definitely does not look good.

There's the bond holders that took a deal to accept less and the "Despicable Vultures." If Argentina is required to pay the "Vultures" it will choose to pay no one. Next pay date is the 31st. Look for a default on that date.

 

[Somewhereinba]

I'm not an economist but this debt has been known about for a long time and I assume the financial sector believed that the debt would never be paid back in full when they defaulted in the early 2000's. I can't imagine Argentina giving in and paying it, wouldn't surprise me if they continue to simply reject any court decision that is made against them to pay it in full. Not sure what effect that would have on the economy, the world already knows their economic reputation.

 

[Rich One]

March 31st is D-Day in Argentina.

D as in "Default". March 31st is when the next payment is due.

And D for big Dollar restrictions coming into place. You can kiss your Xoom goodbye!

Joe,, your crystal ball is all fogged up because of south winds....!

 

[canadababe]

I have taken a bit of an interest in this subject over the last 72 hours because I am worried about my stay in Buenos Aires and in particular restrictions. Why does Argentina make it tough for anyone to bring dollars in - it seems crazy??? They must need dollars or am I being totally blonde? I get the need to pesify the economy and to avoid dollars going in the other direction, but I cannot grasp why they would make it tough for me to bring dollars in to spend on MAC!?????

 

[henryb]

...You can kiss your Xoom goodbye!

Of course. The obvious way to pay your foreign currency debts is to prevent foreign currency from entering the country.

I seriously doubt that any foreign currency enters the country as a result of Xoom operations. I think actual exchange takes place in some third country, most likely Uruguay, therefore there is no requirement to follow Argentine official exchange rate. You are getting pesos here, somebody else's pesos are going to Uruguay. No dollars for Argentina.

 

[Joe]

I seriously doubt that any foreign currency enters the country as a result of Xoom operations. I think actual exchange takes place in some third country, most likely Uruguay, therefore there is no requirement to follow Argentine official exchange rate. You are getting pesos here, somebody else's pesos are going to Uruguay. No dollars for Argentina.

For each 100 US dollar transaction, Argentina has to print 700 pesos for Xoom but only 500 pesos for the official rate at the ATM. Therefore in order to slow inflation, Xoom will be curtailed. This will most likely be achieved via a 30% tax on currency exchange at unofficial rates.