Originally posted by the Voice of America.
Voice of America content is produced by the Voice of America,
a United States federal government-sponsored entity, and is in
the public domain.


Argentine Bond Prices Rise on Relief over Upcoming Debt Revamp

Reuters

   BUENOS AIRES - Argentine bond prices rose on Monday in the first
   session since President-elect Alberto Fernandez named debt
   restructuring expert Martin Guzman as economy minister, the central
   figure in a cabinet that will start serving after Tuesday's
   inauguration.

   Over the counter bond prices popped an average 2.1% higher and country
   risk spreads tightened, showing the market took Fernandez's cabinet
   picks in stride.

   Guzman, 37, will be responsible for sparking growth, taming inflation
   and steering restructuring talks with creditors and the International
   Monetary Fund over about $100 billion in debt.

   Creditors had feared that Peronist Fernandez might take a tough stance
   in upcoming restructuring talks. But Guzman, who sees the problem as
   one of liquidity rather than solvency, has advocated for a debt revamp
   based on a suspension of payments that would preserve eventual
   repayment of principal.

   Such an approach would avoid a "haircut," or outright cut in the return
   of creditors' principal investment.

   "There had been uncertainty about the debt restructuring proposal.
   Guzman does not want to implement a haircut on the principal. So this
   clears some of the fear that had been priced into bonds," said Gabriel
   Zelpo, director of economic consultancy Seido.

   Sovereign risk spreads tightened 123 basis points to 2,194 over
   safe-haven U.S. Treasuries on JP Morgan's Emerging Markets Bond Index
   Plus, having blown out from the 480 basis points where the index stood
   when outgoing President Mauricio Macri, a proponent of free markets,
   took office in late 2015.

.