Argentina bonds up slightly on eve of expected default
NEW YORK, July 29 (IFR) - Argentina bonds were drifting higher Tuesday morning amid light volumes, as government representatives prepared for last-minute talks in New York to avoid a technical default later this week.
An Argentine delegation will meet with US court-appointed mediator Daniel Pollack at 11am, but expectations of reaching a deal with holdout creditors are running low.
"It seems pretty obvious that there is going to be a default," one trader said.
Even so, the sovereign's bonds continue to find support amid belief that exchange bondholders will eventually be paid - even if the government is forced to miss a payment this week.
The bonds are opening marginally higher in an otherwise mixed session for Latin American credits.
Argentina's discounts were quoted at 84.5 mid-market, while the pars were spotted at 52.5, according to traders. Five-year CDS was quoted at 38-41 points upfront, equivalent to a spread of 1898bp mid-market.
"The bonds are less than a quarter point up, but no volumes yet," a second trader said. (Reporting by Davide Scigliuzzo; Editing by Paul Kilby)