Argentina has defaulted on it's international debt twice in the past 30 years, in '89 and in '01. So, the news that it is now floating a 100 year bond was a surprise. That is, it's a surprise that there are buyers for a borrower with such a poor payment history. Such is the desire for higher yield.
What's the chance that in the near future, we look back at this moment and think "we should have seen it coming"? Or, is this time really different?
What's the chance that in the near future, we look back at this moment and think "we should have seen it coming"? Or, is this time really different?
From Bloomberg https://www.bloomberg.com/news/arti...to-sell-first-100-year-bond-as-soon-as-mondayArgentina sold 100-year bonds barely a year after settling a protracted legal dispute tied to a $95 billion default.
With the $2.75 billion sale, the government of South America’s second-largest economy joins Mexico, Ireland and the U.K. in issuing debt that matures over a century, which is often particularly attractive to insurers and pension funds seeking to lock in long-term returns. Argentina, for its part, is taking advantage of historically low borrowing costs to finance the budget and pay off debt that’s maturing in the next few years.