Mensajepor mmarcodelpont » Mié Jul 31, 2013 11:01 am
July 31 (Bloomberg) -- The likelihood that Argentina will default in the coming year is falling the fastest in the world, as speculation builds the U.S. Supreme Court will delay an order requiring the country to repay holders of its defaulted debt.
The cost to protect $10 million of Argentine bonds against non-payment through September 2014 using credit-default swaps has tumbled 27 percent in the past two months to $3 million, according to data compiled by Bloomberg. While the price remains the highest of any debtor nation, the chance that Argentina will renege on its obligations is now below 50 percent for the first time since April, the data show.
Argentina’s legal dispute with holdout creditors including billionaire Paul Singer, who won the right to full repayment in U.S. courts, has kept the nation from borrowing internationally since its 2001 default. While President Cristina Fernandez de Kirchner’s defiance fueled speculation Argentina will opt to default on restructured debt, support from France and bondholders has boosted optimism the high court will consider hearing the case. A decision to do so could delay a resolution to as late as June 2015, law firm Shearman & Sterling LLP said.
“The reaction of investors to all of these new parties who were not even involved in the appeals court case has been positive,” Jane Brauer, a strategist at Bank of America Corp., said by telephone from New York. “They’re now pricing in a higher likelihood that the Supreme Court may take the case and of an eventual positive resolution for Argentina.”