Argentina debt crisis

[muscleman]

Has anyone looked into Argentina debts and could share some thoughts on how to play it and if it is profitable to play this?

 

Both Dan leob and Kyle Bass bought some Argentina debt. However, from the following wiki, I suspect that they also bought a larger amount of CDS.

Elliot Management is demanding par on the defaulted bonds, and I guess they may also have a large CDS position.

 

I have a feeling that this will default first before it recovers. Thoughts?  :)

 

http://en.wikipedia.org/wiki/Argentine_debt_restructuring

 

"Vulture funds, moreover, own a large quantity of credit default swaps (CDS) against Argentine bonds, creating a further incentive to not only trigger a default against Argentina"

"Meeting vulture funds' full face-value demands is problematic for Argentina, because although bonds held by vulture funds are a small share of the total (1.6%), such a settlement would lead to lawsuits from other bondholders demanding to be paid on similar terms and thereby create a liability of USD15 to USD20 billion"

[muscleman]

No one interested? Argentina has defaulted. I think those big boys who bought the CDs could try to push it as low as possible and will create a buying opportunity. I have never bought sovereign bonds before so I hope someone could share their experience, such as GReece restructure. I am on vacation right now so I cannot do much until I get back

[TwoCitiesCapital]

I generally don't pay any attention to sovereign bonds because there are so many ways to screw holders.

 

1) implicit default via inflation (often over night with pegged currencies)

2) structured default that avoids protective hedge triggering (Greece)

3) No one to enforce proper settlement/recovery when default occurs (Argentina a few years back)

 

I'm sure there is good value in this sector, just whether or not you're lucky enough to get what should come to you. I'd stick with distressed corporates.

[muscleman]

I generally don't pay any attention to sovereign bonds because there are so many ways to screw holders.

 

1) implicit default via inflation (often over night with pegged currencies)

2) structured default that avoids protective hedge triggering (Greece)

3) No one to enforce proper settlement/recovery when default occurs (Argentina a few years back)

 

I'm sure there is good value in this sector, just whether or not you're lucky enough to get what should come to you. I'd stick with distressed corporates.

 

 

Thank you.

How do I do researches for corp bonds such as 413627BD1? David Tepper owns some, but I am not sure if he owns the CDS.

[leeway]

Argentina sovereign bonds are still trading at very high prices (eg the benchmark US$ 2033 Discounts at around 87, ~10% yields). Market seems really optimistic thinking this is just a "technical" default which will be cured soon, instead of a real default. No panic selling so far. There are talks about potential private solutions involving some big banks, but the amount is too high and there are other complexities (eg legal claims outside the current judgment) that I am skeptical it would work.

[muscleman]

Argentina sovereign bonds are still trading at very high prices (eg the benchmark US$ 2033 Discounts at around 87, ~10% yields). Market seems really optimistic thinking this is just a "technical" default which will be cured soon, instead of a real default. No panic selling so far. There are talks about potential private solutions involving some big banks, but the amount is too high and there are other complexities (eg legal claims outside the current judgment) that I am skeptical it would work.

 

Where did  you get the quotes? I haven't looked into it further.

It is not worth committing capital if it is trading at 87 right now.

[leeway]

those were from trader's price run. I have not found good free website for Argie bonds prices. Here is one that may be useful:

http://www.boerse-frankfurt.de/en/search/result?name_isin_wkn=argentina&type=ANL

 

[muscleman]

those were from trader's price run. I have not found good free website for Argie bonds prices. Here is one that may be useful:

http://www.boerse-frankfurt.de/en/search/result?name_isin_wkn=argentina&type=ANL

 

Thank you! This is even harder than the muni bonds to start analysis. ::) I think I will pass.