Argentina's Broken Bonds
Italian retail investor's love affair with Argentine bonds ended abruptly when the sovereign left its creditors in the lurch. Angry Italians want someone to compensate them for their losses.
When Giacinto Innocenzi retired last year after 40 years' of
work, he went to his bank in Rome to get advice on how to
invest and manage his money. His daughter's wedding was
approaching and he and his wife planned to help their daughter
and her future husband buy a house together. Innocenzi held 60
million lire ($32,000) in Italian government bonds maturing
June 2001 and had a healthy savings account. His trusted bank
advisor told him that he could nearly double his return if he
used the money to buy Argentine sovereign bonds. "I had never
invested in anything but Italian government bonds," says
Innocenzi. "But my banker advised me against investing in
Italian government bonds, which only had 3%-4% interest.
Instead he told me to buy Argentine bonds and that they had the
same risk as Italian bonds." Today, Innocenzi is holding
$94,300 of worthless Argentine...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.