The year 2001 saw a slump period in the Argentinian economy. The problem was debt which seems to be a pattern among modern nations. The country held tightly to a default had of roughly $95 billion: the largest ever recorded.
Here’s where the Argentina government begins to turn the tables. It’s now the year 2016. The financial industry turns its eyes toward the country and its breaking news. The government announces its solution to surmounting debt.
It will manage it by issuing bonds to the public and under New York state law. The country expected to see the purchase of nearly $12 billion by last month in April 2016 alone. This return to the international markets come as bonds that will mature in five, 10 and 15 year policies.
The agenda is President Mauricio Marci’s who’s undergoing a swift maneuver for stabilizing his economy. That economy was hurt badly during Cristina Fernandez de Kirchner’s tenure in office. These events took Argentina out of the world market during 2001.
The largest financier pursuing the investment option is none other than James Dondero’s Highland Capital Management LP. The asset management firm announces it picking up a significant amount of bonds released by Argentina. The firm now manages $19 billion worldwide and has the resources to make its stake secure.
There is no shortage of cash in Highland Capital’s hands. But we don’t know how much its stake will be. It’s obvious that James Dondero is confident of the new venture by Argentinian President Mauricio Marci.
In fact, James is very optimistic.
The firm got its start as Highland Capital Management LP in the year 1993. Dondero co-founded the organization and now operates as President. He had already purchased Argentinian bonds back in 2014. An investment that shows better returns for the firm’s portfolio than did its energy sector holdings.
Highland saw a 20 percent return from those Argentinian bonds. When the competitive average was 3.3.
The forward drive by Dondero is apparent.
The Highland group sees this a great opportunity, and one not to fail. But as a distressed investor, Capital Management is not the only one prepared to exploit the release of more Argentinian bonds.
A big shift is surely underway worldwide.