UPDATE 1-Clearstream will not process some Argentina coupon payments
(Adds trader quote, bond prices)
By Davide Scigliuzzo
NEW YORK, March 30 (IFR) - Clearstream will not process coupon payments on some of Argentina's local-law exchange bonds due on Tuesday, the clearing house said in a note to clients on Monday.
While markets have widely been expecting intermediaries to block coupon payments on the local law Par bonds due tomorrow, traders marked down the country's bond prices by as much as two points in response to the news.
"I would say bonds are down two points after (the) Clearstream (announcement), but we have not had a single trade today," said one broker in Miami.
Argentina-law Discounts were being indicated at 95.50-96.00 versus 97.00 on Friday, while Boden 2015s were being quoted at 100.75-101.00, or a good 50 cents lower than levels seen at the end of last week.
Prices, however, are hardly firm given that trading in the securities have essentially ground to a halt after Clearstream and Euroclear advised clients last week that the bridge between the two entities would be blocked for some of the local law instruments.
"Bonds are being quoted down and people are trying to get out of positions that they have," said the broker. "This has made the market very illiquid."
Investors have expressed concerns that the US court decision last week to effectively block payments on local-law dollar bonds threatens to broaden Argentina's recent debt default to instruments previously considered beyond the reach of US law. Continuación...