Argentina Bond Guide: Prices Show Debt Generating Gains in 2014
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Argentina’s bonds are holding onto gains this year, even after all the country’s creditors have gone through.
The nation’s dollar bonds have climbed an average 7.5 cents to 69.9 cents on the dollar in 2014, while euro-denominated securities have jumped 7.1 cents to 60.2 cents, according to Bank of America Merrill Lynch index data.
Large price gaps exist between Argentina’s restructured securities, a legacy of exchanges in 2005 and 2010 that offered investors the option to receive bonds with lower coupons and extended maturities, or notes with deeply reduced principal values. The governing law under which debt was issued has also fueled diverging price trends since the notes were sold, according to Alejo Czerwonko, a strategist at UBS Wealth Management’s chief investment office.
“You have bonds issued under Argentine law, New York law and English law, and the risk associated with these three are very different,” Czerwonko said in a telephone interview.
Below is a list of Argentina’s most significant overseas securities.
ID Number Coupon Maturity Amount Out Price Yield ED7860866 8.28 12/31/33 $4.272 bln 80.31 11.27 ED7860346 2.50 12/31/38 $5.297 bln 49.20 8.73
ED7860460 7.82 12/31/33 €2.264 bln 76.89 11.29 ED7860585 2.26 12/31/38 €5.035 bln 46.29 8.62
EI2582910 8.75 06/02/17 $950.5 mln 82.88 17.77 ED8926369 0.45 12/31/38 ¥20.79 bln 30.0* 7.09
* Based on Barclays Plc estimates from Aug. 6.
To contact the reporter on this story: Boris Korby in New York at bkorby1@bloomberg.net
To contact the editors responsible for this story: Robert Burgess at bburgess@bloomberg.netBrendan Walsh
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