Argentine Bonds Decline as U.S. Stock-Market Slump Saps Investor Demand

Argentine bonds slumped for a second day as a U.S. stock slide prompted investors to sell higher- yielding, emerging-market assets.

The yield on the country’s 7 percent dollar bonds due in 2015 rose 33 basis points, or 0.33 percentage point, to 13.27 percent at 4:22 p.m. New York time, according to Bloomberg pricing. The price fell 0.93 cent to 78.63 cents on the dollar.

U.S. stocks fell, extending the first quarterly retreat in more than a year, after Moody’s Investors Service’s warning that it may downgrade Spain ended an earlier rally.

“Trading continues to be equity driven,” said Gunter Heiland, an emerging market debt portfolio manager who helps oversee more than $2.6 billion worth of assets at Greenwich, Connecticut-based fund Gramercy. “A lot of it still depends on the news coming out of the euro area.”

Gramercy hired Heiland and Jeffrey Grills last month to build four new emerging-market debt portfolios. They began buying bonds last night, Heiland said.

Argentina’s peso was little changed at 3.9305 per dollar, from 3.931 yesterday. The peso declined for a sixth straight month, dropping 0.7 percent from the end of May.

To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net

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