Bond Investors Still Angry At Argentina

After playing hardball for months, a cash-rich Argentina has finally thrown a bone to angry investors sitting on $100 billion in defaulted bonds. On June 1 the government said it would recognize up to $23 billion in unpaid interest that has accrued since the December, 2001, default, effectively cutting the implied loss to investors to 75% from the 92% in its original offer last September.

Although that's an improvement, bondholders still reject the notion of such a huge "haircut," which is unpre-cedented by the standards of other sovereign defaults and flies in the face of an export-booming economy that grew 8.7% last year. The government claims the current offer is final but may have to improve its terms if it wants a deal soon.

Edited by Rose Brady

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