Argentina Debt Swaps May Pay $1.4 Billion After Ninth Default

Argentina Debt Swaps May Pay $1.4 Billion After Ninth Default

12:18 - Investors holding debt protection for Argentina could be in line to share compensation of about $1.4 billion after the South American nation defaulted on its foreign debt for a ninth time last month.

Firms holding the country’s credit-default swaps will receive about 66% of the amount covered by the instruments, according to the initial results of an auction to settle the contracts on Friday. They get triggered when a borrower fails to pay its debt. Investors use the instruments to make negative bets on borrowers or as hedges for bond investments.

Argentina, which has a long history of defaults, is negotiating a $65 billion debt restructuring on its foreign debt. The latest deadline from President Alberto Fernandez’s government expires this evening. Given that the nation is already in default, there are no major implications for an additional extension.

Some of Argentina’s largest creditors include Pacific Investment Management Co., Franklin Templeton, BlackRock Inc. and Ashmore Group Plc, according to data compiled by Bloomberg.

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