Highland Capital Management Sets its Eyes On Argentina’s International Bonds Issue

Argentina is set to go back to the international bonds market soon to raise close to $12 billion. When they go to the market, one of the buyers they expect to buy the bonds in order to raise the money is Highland Capital Management LP. Jim Dondero, the president and co-founder of Highland Capital Management said the company is looking to add up a significant number of securities to the asset base. The asset management firm oversees close to $19 billion of credit hedge funds and emerging market credit funds. Highland Capital Management was the largest holder of Argentina’s $4 billion of notes before they paired their holdings for the past six months. These notes are due in 2033.

Argentina is going to attempt to sell an unprecedented amount of debt so that they can pay for settlements with holdout creditors. The leading creditor is billionaire Paul Singer. This debt sellout also suggests that the supposed distressed debt investors who have flocked into Argentina in the recent years can remain to be part of the country’s debt buyers even after it exits default. The plan by Highland Capital Management to invest in Argentina poses a positive image for the country. In an Interview with Bloomberg, Mr. Dondero said, “We plan to hold what we have in the original bonds but are looking to buy some of the new issuance. We’re optimistic on where Argentina is likely to price the debt and where it’s likely to trade, especially relative to other Latin American sovereigns.”

Argentina has been kept out of the global market after they defaulted a record $95 billion in 2001. Since their exclusion, the country has not been able to pay holders of its restructured foreign-law bonds after another surcease of payments in July 2014. However, The United States District Judge Thomas Griesa is expected to lift the ban that prevented Argentina from paying its restructured debt. When this happens, Highland Capital Management is set to be one of the biggest winners.

James Dondero, who currently resides in Texas where the company head offices are located, has over 30 years experience in the credit and equity markets. His primary focus was mainly on high-yield and distressed investing. James is also chairman of other organizations including Cornerstone Healthcare, CCS Medical and Nexbank. He also sits on the boards of American Banknote and MGM studios. James is not just a well-known shrewd business magnate. He is also a philanthropist. He has supported a number of programs touching on education, public policy and veteran affairs.

James Dondero is an alumni of the University of Virginia, Mcintire School of Commerce, where he graduated with the highest honors (Beta Gamma Sigma, Beta Alphs Psi) with dual majors in accounting and finance. In addition, James is also a Certified Management Accountant (CMA) who has earned the right to use the Chartered Financial Analyst (CFA) designation.

Source: http://www.bloomberg.com/news/articles/2016-03-08/argentina-luring-highland-shows-distressed-bond-buyers-to-stay

1 thought on “Highland Capital Management Sets its Eyes On Argentina’s International Bonds Issue”

  1. I am writing a course work and the common knowledge is that federal governments bonds are safest so it’s smart. I need more at best essay review and they should do better in making the right decisions on the type of instruments to invest in.

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