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Mittwoch, 6. August 2014

Investment in Argentine bond credit-linked notes ends less than perfectly

Investment in Argentine bond credit-linked notes ends less than perfectly

See the attached for an important announcement by the Brasil Sovereign II Fundo de Investimento de Divida Externa… (H/T Bloomberg)
This would be that the fund’s net asset value has been cut in half, by $87m, after it transpired Argentine sovereign bonds — the ones Argentina defaulted on last week — did not make very good collateral for credit-linked notes which the fund owned.
Why buy credit-linked notes referencing Argentine sovereign debt? Why would you do that?
We’re not sure. But there it is.
Oddly enough, the fund’s administrator is BNY Mellon. Which has also been the luckless trustee for… Argentina’s restructured bonds.

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