Argentine Gov’t defies ‘vultures’ with dollar bond issue [View all]

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Debt paying 8.75% sees lots of interest, is oversubscribed three times.

Argentina had its most successful foray into dollar markets yesterday since its debt repayments were blocked by New York District Judge Thomas Griesa last year, selling US$1.4 billion in bonds despite attempts from “vulture fund” NML Capital to scare off potential investors earlier in the day.

Economy Minister Axel Kicillof had initially aimed low, saying the government would only be looking to raise US$500 million, maybe expanding to US$600 million if market conditions looked good, but the country was offered three times that amount: US$1.88 billion in total. “The vulture funds failed at scaring off investors. But the idea that Argentina is disconnected from the world is now completely dead after the offers we received,” Kicillof told the press during his visit to Russia.

“It is clear also that holdouts do not have the capacity to interrupt an issue like this,” said Jorge Piedrahita, CEO of broker Torino Capital. “It will be positive to the extent that Argentina can still issue paper.”

This is probably one of the reasons why NML Capital was so quick to react against the proposal, fearing it would reduce its leverage over Argentina. The country could decide to postpone a full repayment or negotiated settlement with what it calls “vulture funds” if it starts findings ways to maneuver around the sanctions imposed by Griesa for refusing to accept holdouts’ demands.

The US dollar-denominated Bonar 2024s are also seen as outside the reach of U.S. courts, as they were not part of the 2005 and 2010 restructurings contested by holdout creditors.

At: http://buenosairesherald.com/article/187369/gov%E2%80%99t-defies-%E2%80%98vultures%E2%80%99-with-dollar-bond-issue