Investors snap up Argentine bonds, hoping for big payday

viernes 20 de junio de 2014 15:40 GYT

By Davide Scigliuzzo

NEW YORK, June 20 (IFR) - Distressed-debt and special-situation investors have been snapping up defaulted Argentine bonds, looking to cash in from any eventual settlement between the sovereign and holdout creditors.

They got a boost Friday after President Cristina Fernandez de Kirchner said she would negotiate with the creditors, sending the restructured discounts some seven points higher to 83.00.

While restructured bond prices have seen dramatic price swings this week as investors reacted to the latest twists and turns in the long-running dispute, untendered debt has held steady - and in some cases has risen 20 points.

The Argentine bonds, which weren't exchanged for new notes during the 2005 and 2010 restructurings, are often hard to source. Many were issued in the UK, Germany and Italy before the country's depression in the early 2000s.

"We have been scouring for scraps of untendered Argentine sovereign notes and the price action has been quite unambiguous," said Michael Roche, emerging-markets strategist at boutique investment firm The Seaport Group.

"Some are held by unorganized investors. Some have been forgotten about."

The highest price, for a 10.5% November 2002 bond originally issued in Deutschmarks and now denominated in euros, was logged in today at 78, said Roche.

Untendered bonds issued under New York law are quoted at the highest prices, followed by those issued under UK, German and Italian law.   Continuación...