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Argentina’s Can’t-Miss Offer To Participate In Its First Non-Deadbeat Century

That sound you hear is Paul Singer's mouth watering.
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By Leandro Kibisz (Own work) [Public domain or CC BY-SA 3.0], via Wikimedia Commons

By Leandro Kibisz (Own work) [Public domain or CC BY-SA 3.0], via Wikimedia Commons

Over the past 100 years, Argentina has defaulted on its sovereign debt six times, an average of once every 16 years and 8 months. Indeed, the longest the country has gone between bouts of not paying bills is 63 years—the gap between its first default in 1827, itself just three years after it issued its first sovereign debt, and its second in 1890, and the first took a whopping 30 years to resolve, making the recent 14-year saga seem practically reasonable. Over the past 66 years, defaults have come roughly every 11 trips around the sun. So this seems, well, optimistic.

Argentina will test investor confidence by offering its first 100-year bond barely a year after finally settling a protracted legal dispute tied to a $95 billion default….

The country shouldn’t have any problems issuing debt given strong demand for higher-yielding bonds amid suppressed interest rates in the developed world, according to Guido Chamorro, a senior investment manager at Pictet Asset Management Limited in London. Selling such a long maturity may be part of a marketing strategy to garner attention, Chamorro said.

On the bright side, over the course of those 100 years, it can only really default on this debt once. And by the time it does you might be dead, unless you plan on living to see the year 2034.

Argentina Plans to Offer 100-Year Bonds [Bloomberg]


Partying like its 2014. By DTRocks (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Greece Tests Just How Forgiving The Bond Market Can Be

Who wants to add to the country's already-unsustainable pile of debt?