The leader of the Highland Capital Management Firm, James Dondero, has announced his plans to join together his $19 billion credit fund with Argentina’s plans to pay off their debts. This new plan to buy some of Argentina’s new bonds will take place in mid-April of 2016. The $12 billion that Argentina hopes to sell come mid-May will mark Argentina’s new entrance into the international bonds market. Highland Capital Management will be one of the many firms that will be buying multiple bonds from the entire country.
Highland Capital Management firm is an investment firm that currently oversees over $19 billion in assets. This includes credit hedge funds as well as emerging market credit funds. The co-founder and current president of Highland Capital, James Dondero, had been the biggest holder of Argentina’s notes that are worth $4 billion. The current worth of $4 billion notes is to be due in 2033.
This also means that debt investors who have piled in Argentina over the years will more likely stay behind to invest even more in the country even after the exit of the country’s default. James Dondero specifically states that the company plans to hold their original bonds; however, the company is still looking for some new issuance. James Dondero and his team are optimistic as to where Argentina will be likely to price their debt as well as where the debt is the most likely to trade in regards to other Latin American countries.
In total, Argentina plans to sell $11.68 billion of bonds that will yield around 7.5 to 8 percent by mid-April. The bonds will be sold at three different maturities consisting of five years, ten years, as well as thirty years. Jim Dondero expects to see the yields fall down to 6 percent in the short-term. This overall prediction is also predicted to improve the overall outlook on the country’s monetary as well as fiscal situation.
The country itself exited this market in 2001 due to a $95 billion default. James Dondero is confident that their help will surely improve the new fiscal year for Argentina as well as the many years to come in the economic world.