Why Are Dollar Bonds Being Abandoned By Investors ??

[Rich One]

Sharp drop of Bonar 2015 and Boden 2015 . Investors fear the new debt service will be hard to meet, and investors may have to receive new Bonds at the end.

http://www.infobae.com/2014/06/02/1569657-sigue-la-huida-inversores-los-bonos-dolares

".....Falling dollar bonds does not stop. Investors are coming because there are several fronts that threaten them. In 2015 expires Boden 2015, which opened with 0.6% retracement, there will almost pay $ s6.000 million. If you add other maturities are less than half of the reserves....!

 

[PhilipDT]

If the supreme court doesn't agree to hear Argentina's appeal then a default is more than just a remote possibility.

 

[ajoknoblauch]

If the Court does not accept the case, will Argentina then stiff its attorneys?

 

[GS_Dirtboy]

The core issue in Argentina is not it's credit issues. Those are a result. The core issue is that it doesn't produce much. It's main export is soy, with some corn, wheat and beef thrown in. That leaves it wide open to price fluctuations in the commodities market. Fortunately, those prices are high at the moment. Even the vast Vaca Muerta field is pretty much out of reach without foreign assistance.

Add to this that Argentina insists on trying to live like an A player when in reality it might not even be a B player in the world markets. This is a recipe for on-going financial issues - aka living beyond your means.

 

[JoeGillis]

The core issue in Argentina is not it's credit issues. Those are a result. The core issue is that it doesn't produce much. It's main export is soy, with some corn, wheat and beef thrown in. That leaves it wide open to price fluctuations in the commodities market. Fortunately, those prices are high at the moment. Even the vast Vaca Muerta field is pretty much out of reach without foreign assistance.

Add to this that Argentina insists on trying to live like an A player when in reality it might not even be a B player in the world markets. This is a recipe for on-going financial issues - aka living beyond your means.

Excellent summary, GS.

 

[dennisr]

Forced Default

“We believe that, barring revision by the Supreme Court of the lower-court’s ruling, the best option for the Republic is to permit the Supreme Court to force a default and then immediately restructure all of their external bonds such that their payment mechanism and other related aspects stay outside the reach of the American courts,” Boccuzzi and two others wrote in the memo.

http://www.bloomberg.com/news/2014-05-30/argentina-lawyer-says-default-likely-if-high-court-rejects-case.html

 

[ghost]

There is a strong probability the AR will default anyway. However if the Supreme fails to take the case or it they should rule against AR then AR has someone to blame for the default. And we all know how she loves to blame the US for everything.

 

[GS_Dirtboy]

I don't hope for a default by any means. A default will not be good for anyone who lives here (except the bottom-feeder investers). But, if there is one, you can be sure the K's will point the finger somewhere else but themselves.

 

[dennisr]

Suspect of the recent Paris Club settlement too. Bulk of payments $$$$ will be the responsibility of the next President. Moreover, settlement period is five years and AR agreed to pay the full monte: principal 5 billion$, accrued interest 2 billion$ and penalties to the tune of 2 billion$. Most thought Kicilcoff could have gotten the deal spread out over ten years.
Nothing like strapping the next administration with a ton of debt and due payments.

 

[Redpossum]

Suspect of the recent Paris Club settlement too. Bulk of payments $$$$ will be the responsibility of the next President. Moreover, settlement period is five years and AR agreed to pay the full monte: principal 5 billion$, accrued interest 2 billion$ and penalties to the tune of 2 billion$. Most thought Kicilcoff could have gotten the deal spread out over ten years.
Nothing like strapping the next administration with a ton of debt and due payments.

That's not complete. There's a clause which provides for increasing the repayment period to seven years if foreign investment doesn't meet certain target levels.

But your point is valid. Kicillof should have been able to get a better deal, and I was suspicious as soon as I saw the deal had been concluded so rapidly. Who the heck shakes hands on a nine billion dollar deal within the first 24 hours? This and many other signs hint of major issues that are being hidden from public view. I'd love to know what the secret clauses, (or under the table deals), were about. There's got to be something big and very ugly under the surface here.