Gramercy Funds Management, one of Argentina’s staunchest defenders, has once again forecast a $65 billion recovery of the country’s troubled external debt. just as bonds fall to year lows.
The odds are increasing that voters – facing triple-digit inflation in the midst of an impending recession – will reject the government of President Alberto Fernández in October’s elections (who this Friday announced his withdrawal from a possible re-election) and welcome a more market-friendly leadersaid Kathryn Exum, director and co-head of sovereign research and strategy at the Greenwich, Connecticut-based fund.
For Gramercy, that transforms the recent losses seen on Argentina’s dollar debt an opportunity. key bonuses They fell this week to their lowest level this year. and those who ripen in 2030 yes yields of around 23%.
“We are constructive on current prices and We expect a significant increase”said Exum. “This is a good time to review credit as political change is likely on the horizon.”
Gramercy has often taken an optimistic approach to Argentina, even in difficult times. Its portfolio managers are betting on volatile bonds after the 2020 quake, and said that debt relief would stimulate a virtuous cycle of economic recovery.
That recovery did not materialize.. Country risk, which is the extra return required by investors to hold Argentine bonds over US Treasuries, has risen well over 26 percentage points, according to data from JPMorgan Chase & Co., the second-highest risk in Latin America, after Venezuela.
Annual inflation rose more-than-expected to 104% in March as the country faces another year of economic contraction as a record drought cuts exports of key crops. The government is increasingly relying on creative measures to protect dwindling international reserves, as the country continues to lose legal battles to Wall Street.
Exum, of Gramercy, consider that all this is an opportunity. A new government, he said, could lead to an aggressive economic stabilization planA renegotiation the US$44 billion loan agreement with the International Monetary Fund e an agreement with the bondholders foreigner.
Although not all the candidates are known yet, polls show that Horacio Rodríguez Larreta; former Defense Minister Patricia Bullrich; and independent candidate Javier Milei would do well against the governing coalition. Previous provincial elections showed growing support for opposition-aligned candidates, giving an early indication of what August’s national primaries will look like.
“As time goes on and we get more clarity on the candidates, the bond floor will increasesaid Exum.
“Our base case is that any recovery is substantially above current prices.”
Source: Clarin
