Description: After fifteen years in the debtors’ doghouse, Argentina has reentered the bond market. When the country defaulted on its debts in 2001, the bondholders resorted to various maneuvers to try and secure their funds, even going so far as to seize an Argentinian navy ship. But this new bond issue seems to be welcomed by investors, with demand far outstripping supply, possibly due to a healthy interest rate in a time of low or negative interest.

Date: April 19, 2016

Source: theglobeandmail.com

Link: http://www.theglobeandmail.com/report-on-business/international-business/latin-american-business/argentina-returns-to-debt-markets-with-165-billion-bond-sale/article29682318/

Discussion Points:

1) What did you find surprising about Argentina’s return to the bondmarket?

2) The article discusses the high demand for the bonds and the high interest rates. Would you expect the bonds to sell at a premium or a discount?

3) Depending on your answer to question two, how will the investors account for the transactions? What about the bond issuer?