Argentina’s peso forwards are headed for their biggest weekly increase since March on speculation private banks and the country’s holders of defaulted bonds will reach an agreement to resolve a U.S. lawsuit.
Non-deliverable peso forwards due in three months gained 2.3 percent to 8.9450 per dollar this week as of 10:45 a.m. in New York, the most since the week ending March 7. Contracts due in six months have climbed 3.1 percent to 9.7 per dollar since Aug. 1.
The official peso was little changed at 8.2734 today. Argentina defaulted on its international bonds last month after a U.S. judge blocked payment of notes because President Cristina Fernandez de Kirchner refused to comply with orders to pay debt held by investors who didn’t accept restructurings in 2005 and 2010.
Investors are speculating that a group of foreign investment banks including JPMorgan Chase & Co. will reach an agreement with the holdouts that will allow Argentina to resume paying its debt.
Forwards have been “strengthening aggressively in the past couple of days, which is totally unusual for a country that’s in default,” Cristian Gardel, manager at brokerage Pampa Trading SA in New York, said in a phone interview.
“This has to be driven by the expectation that there will be an agreement soon.” JPMorgan, Citigroup Inc., HSBC Holdings Plc and Deutsche Bank AG are in talks with holdouts led by Elliott Management Corp. to resolve the dispute, according to a person familiar with the meetings who asked not to be identified because the talks are private.
The banks are looking to put together a group of investors to buy disputed Argentine debt to resolve the U.S. lawsuit, according to a banker familiar with the talks.
Economy Minister Axel Kicillof said this week that while the government wouldn’t oppose a third-party solution, it can’t participate since it could violate a bond clause and trigger claims of as much as $120 billion.
bloomberg.com
Non-deliverable peso forwards due in three months gained 2.3 percent to 8.9450 per dollar this week as of 10:45 a.m. in New York, the most since the week ending March 7. Contracts due in six months have climbed 3.1 percent to 9.7 per dollar since Aug. 1.
The official peso was little changed at 8.2734 today. Argentina defaulted on its international bonds last month after a U.S. judge blocked payment of notes because President Cristina Fernandez de Kirchner refused to comply with orders to pay debt held by investors who didn’t accept restructurings in 2005 and 2010.
Investors are speculating that a group of foreign investment banks including JPMorgan Chase & Co. will reach an agreement with the holdouts that will allow Argentina to resume paying its debt.
Forwards have been “strengthening aggressively in the past couple of days, which is totally unusual for a country that’s in default,” Cristian Gardel, manager at brokerage Pampa Trading SA in New York, said in a phone interview.
“This has to be driven by the expectation that there will be an agreement soon.” JPMorgan, Citigroup Inc., HSBC Holdings Plc and Deutsche Bank AG are in talks with holdouts led by Elliott Management Corp. to resolve the dispute, according to a person familiar with the meetings who asked not to be identified because the talks are private.
The banks are looking to put together a group of investors to buy disputed Argentine debt to resolve the U.S. lawsuit, according to a banker familiar with the talks.
Economy Minister Axel Kicillof said this week that while the government wouldn’t oppose a third-party solution, it can’t participate since it could violate a bond clause and trigger claims of as much as $120 billion.
bloomberg.com
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