Empty pockets TC

What To Expect From Sri Lanka’s Debt Restructuring? Lessons From Argentina And Ecuador

Alicia Garcia Herrero & Junyu Tan (Natixis) | After the pre-emptive announcement to suspend all foreign debt repayments until discussions for an IMF bailout are completed, on May 18 Sri Lanka stepped into the dangerous path of a sovereign default as it missed the 30-day grace period on its USD 78 million worth coupon payments originally due April 18. Against this backdrop, investors’ key question is how deep the debt…

Argentina default noveno

Argentina: IMF Talks To Take Centre Stage

While the new bonds may continue to benefit from a weak US dollar and the lower-for-longer global rate environment, the challenging economic outlook and ongoing uncertainty around the IMF talks will likely cap the yield compression potential.


Don’t let the facts get in the way of “Argentinology”

ATHENS | Via Macropolis | It should come as no surprise that in a the country where a large part of the political establishment is comfortable with the notion that some sort of conspiracy drove the country to bankruptcy, the same key players should spend the last few days in a hopeless debate on the recent developments in Argentina.


Argentina: Griesa’s ruling sets dangerous precedent in debt restructuring processes

MADRID | The Corner | Many got it all wrong: the problem with Argentina is not the so-called “second default in 12 years,” but U.S. District Judge Thomas Griesa’s ruling. The country will need to pay holdouts $1.33 billion plus interest. And that sets an extremely dangerous precedent for future restructuring processes of sovereign debt. No bond-holder will accept a haircut knowing that, at the end of the day, he could ask for the full amount. (Fig left: Argentina’s national reserves; right: sovereign CDS).


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Argentina and the economic crisis cliff

Amid an important devaluation of its currency, and with its central bank rapidly losing reserves, Argentina is entering a critical stage as it attempts to avoid a new economic crisis. In November 2013, Argentine President Cristina Fernandez de Kirchner decided to limit her public appearances and delegate to new ministers. Economy Minister Axel Kicilloff and Chief Minister Jorge Capitanich were tasked with revising the economic course of a government that is starting to show weaknesses. Today, not only is the Argentine public worried, but so too is the international community.

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Argentina’s debt case: Reading the tea leaves

MADRID | By Luis Martí | You’ll probably know by now that the Court has turned down the Argentinian request to hear an appeal of a lower court decision. The decision established that the unwillingness of Argentina to pay defaulted holdouts, while duly servicing restructured debt, violated the spirit of the pari passu clause. Well, there’s a lot to be said for this interpretation, and a lot against.

Bolsas emergentes

Not all emerging countries are the same

MADRID | By Francisco López | Argentina’s devaluation contagion pulled downwards such different assets as Brazil Stock Exchange, Argentinian or South African currency , or even Indonesia’s bonds. In Spain, the Ibex fell again by 1.1% losing 6.7% points in just six days, which means its hardest time in past twelve months. When panic spreads, investors do not consider each countries’ economic circumstaces individually.

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Stock markets plunge

MADRID| By J.P. Marín Arrese | Buenos Aires acted in the right way by bridging the gap between its currency real value and the fake official quote. Yet, in doing so, it has openly exposed the emerging countries’ vulnerability. For the last years, their expansion delivery showed an outstanding record harnessed by cheap money conditions and renewed risk appetite, once the financial crisis looked firmly under control.

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Argentina’s Peso devaluation “bites the bullet” without a full set of teeth

NEW YORK | By JP Morgan’s Foreign Exchange team | A devaluation unanchored (at least so far) by a needed broader anti-inflation plan can only induce expectations of further devaluation in Argentina (if the government is effectively adopting a free-float) or a resumption of reserve loss (when and if the government intends to subsequently resume its Foreign Exchange intervention).