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The $15 Billion of Distressed Argentine Bonds No One Talks About

  • Like the federal government, provinces binged on foreign debt
  • Now they’re likely to piggyback off a sovereign restructuring

A $15 billion pile of provincial bonds is lurking below the surface of Argentina’s already imposing sovereign debt load, setting the latest fiscal fiasco apart from any in the country’s history and threatening to saddle foreign investors with even more losses.

The nation’s provinces were among the most prolific issuers when international capital markets reopened to Argentina following business-friendly President Mauricio Macri’s election in 2015. By offering interest rates in excess of 9%, they were able to lure yield-hungry investors to little known and sparsely populated corners of the country -- places like frigid Tierra del Fuego in the extreme south and desert-like Jujuy in the north.