June 25 (Bloomberg) -- Argentine warrants linked to gross domestic product climbed to a one-week high on bets that growth in South America’s second-biggest economy will trigger payments. The dollar-denominated warrants rose 0.05 cent on the dollar to 7.91 cents at 3:54 p.m. New York time, the highest since June 18.
The warrants are advancing after the government this week closed its offer to restructure $18.3 billion worth of defaulted bonds held out of a 2005 settlement.
Creditors holding about $12.1 billion of eligible defaulted debt, or 66 percent of it, tendered their securities in a restructuring that ended June 22, Economy Minister Amado Boudou said June 23.
“Overall, the trend is probably positive,” said Eduardo Suarez, an emerging-markets debt strategist at RBC Capital Markets in Toronto. “The country has solid foreign-exchange reserves and strong economic growth that supports tax revenues. The upside from the swap is probably offset by risk of the new bonds being sold and the Paris Club not being settled.”
Argentina won’t resolve about $6.7 billion in additional outstanding debt with the Paris Club group of creditor nations if it is required to have an oversight program with the International Monetary Fund, Boudou said yesterday.
Argentina’s B- rating will remain constrained by the government’s limited sources of funding, Standard & Poor’s said yesterday in a statement.
The country’s access to international credit markets will “remain challenging” due to lawsuits by creditors who rejected the government’s swap offer, S&P said.
Argentina defaulted on a record $95 billion of debt in 2001. Boudou said a successful restructuring will help the country regain access to international credit markets and lower borrowing costs for provinces and companies that seek to sell debt.
The peso dropped 0.1 percent to 3.9308 per dollar, from 3.9275 yesterday. The currency dropped 0.2 percent this week.
To contact the reporter on this story: Drew Benson in Buenos Aires at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Source: http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a89CPFNFVNWk
