The group would need to hold at least 25 percent of the US$5.4 billion of debt to accelerate after they officially fall into default on October 30, when a 30-day grace period expires.

Wednesday, October 29, 2014

Another hedge fund to demand acceleration on Argentine bonds

Owl Creek Asset Management LP is discussing the formation of a group that will demand immediate repayment on Argentine bonds.

The group would need to hold at least 25 percent of the US$5.4 billion of debt to accelerate after they officially fall into default on October 30, when a 30-day grace period expires.

Owl Creek said accelerating the so-called par bonds, which trade at about 54 cents on the dollar, may provide investors with a gross return of 100 percent in a subsequent restructuring.

The company said that could take place as soon as January, when Argentina may negotiate with a separate group of investors who won a lawsuit to block payments on the nation’s overseas debt until bonds from its previous default in 2001 are paid in full.