Argentina Returns to Bond Market After Debt Settlement

Written by Jubilee USA Network   

Argentina returns to the bond market after 15 years with access to limited international financing. Argentina will use part of the money it raises to pay hold-out funds from the country's 2001 default.‎ Those funds rejected previous settlement offers and instead sued Argentina for full repayment. Argentina agreed to terms with the funds in February ending a decade-long legal dispute.

"In order for Argentina to return to the markets, it had to settle with hold-out funds. Unfortunately that settlement validates a predatory business model," commented Eric LeCompte, a United Nations expert on sovereign debt and executive director of the religious development group Jubilee USA. "I am concerned how this precedent will impact some of the world's poorest people living in developing countries."

Argentina raised $16.5 billion in the bond sale and reports that it received offers worth $68.6 billion. Interest rates are between 6.25% and 7.62%. Argentina plans to pay $9.3 billion to hold-out funds on April 22nd.

"We also can't forget that we now have a series of court rulings in the Argentina case that encourages more predatory activity in the markets," said LeCompte. "Globally there is more than 900 billion dollars in debt that is not protected from this predatory behavior."

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