A Country Crashed and Burned
With the Argentine economy quickly crumbling and the rules changing with such bewildering speed, little is certain in the debt negotiations of local companies and their creditors.
Argentina's economy is wrecked, the currency ripped to
shreds and the people more cynical than ever. Violence is in
the air. The government of President Eduardo Duhalde is
incapable of enunciating, much less executing a coherent set of
Still, life must go on and Argentine companies have a
monumental task head to repair their balance sheets and try to
stay in business. With very few exceptions, corporate Argentina
is bankrupt. Even strong, formerly well-capitalized exporting
companies with overseas subsidiaries have defaulted -
involuntarily - on their debt. Although a few private-sector
borrowers have already knocked together deals with their
creditors, it will be many months, perhaps years even, before
the country's companies and banks have settled on new payment
rules with their creditors.
Corrado Varoli, head of Latin America at Goldman Sachs,
says, "Most companies are in the process of evaluating [their
options] and it is too early to say...
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