As IMF Talks Bog Down, Argentine Bonds Plunge Toward 30 Cents
Bloomberg
3/8/2021
Scott Squires and Jorgelina do Rosario
(Bloomberg) -- Six months after Argentina exited default, its new bonds have sunk to a mere 30 cents on the dollar.
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The depressed price is, in fairness, partly the result of the basic mechanics of the securities -- they carry artificially low interest rates and a generous grace period -- but it also reflects a grim reality that’s setting in on creditors: The IMF deal that the country desperately needs is a long ways off.
Without that accord, and the fresh capital it could bring, Argentina’s pandemic-ravaged economy will remain listless and its finances so precarious that a default -- the country’s fourth of this century -- becomes all but inevitable when the bonds start coming due. At today’s prices, the bonds yield more than 1,500 basis points, or 15 percentage points, above U.S. Treasuries.