Two critical meetings scheduled for Friday could shape the path
ahead for Argentina’s dispute with holdout
creditors, after the sovereign defaulted on Wednesday following
a break down in last-minute talks with bondholders.
||Cristina Fernández, Argentina's
Axel Kicillof, finance minister, and
Alvarez, justice minister, with Buenos Aires
governor Daniel Scioli
Source: Casa Rosada
US Judge Thomas Griesa has called a hearing for 11am in New
York, while the International Swaps and Derivatives
Association, ISDA, is also due to discuss Argentina today, to
consider whether CDS referencing the sovereign should be
Meanwhile, markets on Thursday came to terms with
Argentina’s default after rumors of a deal drove
a rally on Wednesday. CDS referencing Argentina widened to 44
points up front on Thursday, after tightening by 10 points,
to 30, on Wednesday.
Some liquid LatAm corporate bonds sold off on Thursday. But
bond market observers said most investors were familiar with
the differences in risk profile between Argentina and other
Latin borrowers, and attributed the widening to a softer tone
"Some of what our market is doing is a delayed reaction to
what has been happening in US high yield," said one market
source, saying that bond investors were reacting to a weak
earnings season and comments from the US Federal Reserve and
adjusting valuations after a period of tightening.
After talks between Argentina’s banking
association and the holdouts also ended on Wednesday without
a deal, reports indicated that some international banks were
in discussions on Thursday to a similar end. Spokespeople for
Citi and JPMorgan declined to comment on the rumors.