© Reuters. ‘Century Bonds’ Take on New Meaning as Argentine Rout Deepens

(Bloomberg) — Such is the sell-off in Argentina’s assets that it now has the world’s cheapest Eurobonds –and local yields headed for 100%.

The government’s average dollar yields climbed to 27% on Wednesday from 11% last week, according to Bloomberg Barclays (LON:) indexes. With its securities priced so far into distressed territory, it’s a clear signal that traders think Argentina’s government may default on its obligations.

Losses on Argentine external debt total 40% so far this week, according to data compiled by Bloomberg. Franklin Templeton’s Michael Hasenstab and Ashmore are among the investors that have been hurt by the collapse.

The rout has been even worse in the local market. Peso bonds have surrendered almost half their value in dollar terms since President Mauricio Macri lost last weekend’s primary election, sparking fears that populist opposition leader Alberto Fernandez will defeat him in the main vote in October. Short-dated securities maturing in November next year trade at 63 cents, or a yield of 89%.

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2019-08-15