Argentina made a strong comeback to the international bond markets by making a sale of debts worth $65bn, thus ending a 15-year long isolation it faced after defaulting in the year 2001. The government plans to use the funds raised for repaying the bondholders, who for a long time have been critical of Argentina’s debt restructuring provisions.
The bond sale comes after Argentina entered into an agreement with creditors, following terse legal proceedings. Financial experts believe that Argentina’s return to the debt markets will provide the much-needed boost to its economy. The country that has been grappling with economic slowdown would now focus on revival after clearing debt default, one of its key priorities in recent times. The positive impact was already visible with the country’s sovereign rating going up with credit rating agency Moody’s, although Argentina continues to be a jittery investment destination.
Drawing a lesson from the past, Argentina has been cautious in the issuance of new bonds and has drafted in provisions which safeguard its interests in the eventuality of another default. Analysts believe that Argentina’s submission to the “litigating creditors” sets a wrong precedent and leaves other nations vulnerable to similar extortions in future.