Argentina government is planning to meet with investors in New York, Los Angles, and Washington next week. This is viewed as a concrete step of raising money in global debt markets for the first time since 2001 default. The government is planning to use proceeds as means of settling messy legal disputes with investors over the unpaid debt that plunged millions of middle-class citizens into poverty. Mauricio Macri, the president, expressed his hope of closing that painful chapter in Argentina history, bringing down borrowing cost, and attracting investors needed to kick start growth.
President Macri, a free market champion, won 2015 presidency on promises of restarting the stagnant economic growth in Argentina. According the president, settling holdout creditors from earlier debt and ending markets pariah are the key to opening Argentina economy. The fact that the current government has been in power for four months only and it has solved the issue that has been pending for more than a decade is a major success.
Investors seemed convinced by this strategy, and Argentina has already received endorsements from investors all over the world, and two-third of them are based in the United States. This was reported by finance minister Alfonso Prat-Gay. Besides, many analysts consider 8% yield as fair return considering the risk entailed.
Highland Capital Management, which oversees over $19 billion, is planning to snap a significant amount of Argentina issuance. Before paring its holding, the firm had been the largest holder of Argentina $4billion notes that is dues to mature in 2033. Highland capital has been amongst the biggest winner when the ban that prevented the Argentina from paying it restructured debt was lifted by U.S. District Judge Thomas Griesa. James Dondero, co-founder, and chief executive officer of Highland Capital reported that the firm has earned annualized returns of close to 20% from Argentina bonds since June 2014. This earning has helped the firm offset losses incurred last year from an investment in energy sector.
Currently, James Dondero oversees Highland Capital investment strategies and operation of institutional and retail products. His extensive experience in credit and equity markets spans three decades. Dondero is one of the original pioneers of Collateralized Loan Obligation. In his career, he has received numerous accolades that include the Lipper Award for Floating Rate Opportunities in 2014 and the Morningstar’s 5-star designation for Global Allocation in 2014. Before co-founding Highland capital, Dondero was serving as the chief investment officer for Protective Life’s GIC subsidiary, in a span of five years the business grew from startup to $2billions.
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