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Schroders 07.07.2014 17:25:05

Clock ticking for Argentina to strike deal with creditors - QuickViews by James Barrineau, Co-Head of Emerging Markets Debt Relative.

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Clock ticking for Argentina to strike deal with creditors

July 2014

 

 Quickview: Clock ticking for Argentina to strike deal with creditors

   by James Barrineau, Co-Head of Emerging Markets Debt Relative

In summary:

  • A refusal by the US Supreme Court to hear an appeal leaves a negotiation with holdout creditors as the sole avenue to avoid a default.
  • The market is quite optimistic that a negotiation can be concluded, despite a standing law in Argentina that the holdouts cannot be offered a better deal than those who accepted the original restructuring deal.
  • We think the market is likely getting ahead of itself, just as it did in assuming that the Supreme Court would not outright rule against the government.
  • Even if a deal is reached, it will likely rely heavily on a payment in additional bonds.

 

Enjoy reading. Kind regards,
Schroders Switzerland

 

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