Once and Future Euro Debt

Mar 1, 2002

Europe should represent a fantastic new opportunity for Latin American debt issuers, with the advent of a single currency and its increasingly integrated capital markets.
However, the chaos in Argentina following its default on $141 billion of debt in December has made life a lot harder for European investors and for prospective borrowers alike. The good news is that European investors burned by their unhappy experiences with Argentine debt are migrating to mutual funds managed by professionals who are intimately aware of the concept of risk and reward.

Argentina probably delayed its financial collapse by a year or so partly because it was able to sell a lot of debt to less discriminating retail investors, especially in Italy and Germany. Individual investors in those markets would often take up to 80% of the euro bonds issued by Argentina and other Latin American issuers. ...

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