Dollar bonds sink after setback against Argentina in million-dollar lawsuit

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Before the official opening of the markets, Argentine bonds were in dollars plummeted by up to 5%. The London ruling, which obliges the country to pay 1,330 million dollars for the manipulation of the official indices, served only to worsen a bad performance that the debt instruments had presented in recent days.

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Global bonds are down more than 5% and those governed by local laws are down more than 6%. Country risk stood at 2,352 points. Until April, presents the Argentine debt retracements above 5%, in a market attentive to diversity macro imbalances.

Funds Palladian Partners, HBK Master Fund, Hirsh Group and Virtual Emerald International Limited, which held GDP-linked coupons Argentina issued in 2005 after the default, sued Argentina in 2019 for up to $643 million of Euro. The cause: a change in the way GDP was counted had left them without the annual payment Argentina was obligated to make if the country grew beyond a certain level.

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In the last few hours, Judge Simon Picken has spoken out in favor of these four funds investment. He specified that the country must pay not only those 643 million euros plus interest calculated since 2014, but will have to disburse a total of 1,330 million euros which correspond to all securities linked to GDP, of which the four funds hold around 48% of the coupons issued in 2005 and 2010.

“The sentence is obviously significant. We will ask for a stay of execution,” the Argentine lawyer said in court, according to the Bloomberg news agency. Argentina will also appeal the sentence.

PPI analysts pointed out: “While it is true that the international level has not been very pleasant, the uncertainty and expectations for the long weekend locally awaiting the announcement”, by Sergio Massa. In this sense they said: “The relationship between the trend of net reserves and the weighted average price of securities is remarkable”.

The delay in announcing a differential exchange rate for agriculture, scheduled for the first round of this month and approved this Wednesday, has only deepened the hemorrhaging of reserves, in a context where agricultural income has returned to minimum.

Central sold $49 million on Tuesday and deepened its red for net sales in the market up to $3.3 billion.

Source: Clarin

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