The Examiners Tackle Argentina

This month, the Examiners will tackle a timely and thorny topic—Argentina’s debt troubles.

Last month, the U.S. Supreme Court declined to take up a long-running battle between Argentina and its bondholders. The court’s move means that a lower court ruling barring Argentina from repaying its new bonds ahead of its old bonds will stand, and Argentina is now entering mediation with a group of holdout bondholders, mostly hedge funds, that have refused to accept the country’s restructuring proposals. At stake in the talks is Argentina’s ability to avoid what would be its second default in 13 years, and it must reach a deal by next Wednesday. A federal judge ordered the country and its holdout creditors to around-the-clock mediation. But as of Friday afternoon, the mediator said no deal had been reached, and Argentina’s delegation was slated to return home from the talks in New York.

Given the important role of the holdout bondholders—whom Argentine officials have called “vulture funds”—this month’s question asks our panel of experts to turn a critical eye to investors in distressed debt and the place they hold in the restructuring ecosystem.

As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?

We’ll be posting responses starting next week. In the meantime, please feel free to share your views in the comments section.

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