Buenos Bonds

argentinaShould Argentina not pay its bondholders by Friday, it will default for the second time in 13 years. Argentina is paying investors who swapped their previously-defaulted bonds for new, less valuable bonds, but isn’t paying investors who refused the swap. A US judge is now prohibiting Argentina from paying anyone until the holdouts are satisfied. There’ll be no contagion, but Argentina’s economy may shrink due to reduced spending by bondholders.

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