Argentina celebrates bond payoff as end of an era

[Judi Lynn]

Source: Associated Press

Argentina celebrates bond payoff as end of an era
MICHAEL WARREN, Associated Press
Updated 08:09 p.m., Thursday, August 2, 2012


[font size=1]
FILE - In this Feb. 20, 2002 file photo, demonstrators kick the steal covered front of a bank in Buenos Aires,
Argentina, demanding the return of their deposits in dollars and not in pesos. Argentina had just defaulted
on more than $100 billion in foreign debt, banks were shuttered, the economy was in ruins and streets
were filled with pot-banging protesters whose chants of "throw them all out" would send five presidents
packing. Argentina's government is celebrating their upcoming Aug. 3, 2012 payoff of ten-year bonds given
to people whose savings were confiscated a decade ago, suggesting it is a lesson for European countries
now mired in foreign debt. (AP Photo/Daniel Luna, File)[/font]

5 hours ago • Associated Press

Bond payoffs are supposed to be boring, but Argentina's president is celebrating Friday's final $2.3 billion payment on a bond given to people whose savings were confiscated a decade ago, calling it a lesson for European countries now mired in foreign debt.

The nation's economic disaster left thousands with a grim choice after the government seized their dollar-denominated deposits to stop bank runs in 2002. They could switch to devalued pesos and regain access to what was left of their savings, or accept a piece of paper promising to repay the money in dollars over the next 10 years.

Few had any faith in the government's promises back then. Argentina had just defaulted on more than $100 billion in foreign debt, banks were shuttered, the economy was in ruins and streets were filled with pot-banging protesters whose chants of "throw them all out" would send five presidents packing.

But Argentina has mostly paid up after all, making good on 92.4 percent of that defaulted debt so far, including $19.6 billion in U.S. currency over the years to cancel the Boden 2012 bond. Most of the hard-luck account-holders later sold the bonds at a loss, but as the government makes its last $2.3 billion payment on Friday, the few stalwarts who kept the faith have been made whole, while earning a modest 28 percent profit over the years.

Read more: http://www.seattlepi.com/business/article/Argentina-celebrates-bond-payoff-as-end-of-an-era-3757266.php

[dbackjon]

1. Steal-covered front of a bank?

I like it