LONDON, July 31 (IFR) - The price of the restructured bond
on which Argentina missed an interest payment, leading the
country into a technical default, was stable in early London
Argentina's Discount due 2033 notes were bid at a price of
95 as of 0800BST Thursday, according to Exotix, marginally
higher than at the US close.
However, Stuart Culverhouse, head of research at Exotix,
warned that "not too much should be read into this".
He added: "New York trading will drive [the price action]."
On Wednesday, the sovereign suffered its second default in
13 years, after failing to reach an agreement with holdout
creditors, which prevented it from making the interest payment
to holders of its restructured bond.
Reuters reported that Argentina's one-year CDS was quoted
21bp wider at the European open, according to Markit, at
4,708bp, though its five-year CDS was quoted 400bp tighter at
1,444bp, signalling investors believe a resolution will
eventually be found.
"Argentina may end up in default for a short period, but as
long as people are talking, it may not have such a big impact,"
Just hours after S&P downgraded the country to selective
default, mediator Daniel Pollack said Argentina would
"imminently" be in default on its obligations.
"The ordinary Argentine citizen will be the real and
ultimate victim," said Pollack, after the talks failed to
placate the holdouts demanding full payment on their bond
Economy Minister Axel Kicillof said the country could not
obey a US court order to pay the holdouts in full.
(Reporting by Sudip Roy and Abhinav Ramnarayan (additional
reporting by Carolyn Cohn); editing by Helene Durand and Philip