Argentina is about to issues new bonds to international bond markets within the next month with the aim of raising approximately $ 12 billion. Highland Capital Management is expected to be a key buyer. Highland Capital oversees $ 19 billion, which include emerging market credit fund and credit hedge fund. According to James Dondero, the co-founder and the president of Highland Capital, the firm expects to invest a significant amount on Argentina securities.
Highland Capital plans to invest comes as a good indication for Argentina as it is trying to sell a huge amount of debt and pay for the settlement. It also implies that distressed debt investors in Argentina are likely to remain as the buyers of the country debt.
James Dondero is the co-founder of Highland Capital Management and currently serves as the president of the firm. He has a rich experience that spans over 30 years in equity, credit market, and high-yield and distresses investment. He has been a pioneer of Collateralized Loan Obligation markets and credit-oriented solutions for institutions and retail investors all over the world
It worth noting that, before paring its holding in the last six months, Highland Capital was the largest holder of Argentina $4 billion of notes due to mature in 2033. According to Dondero, the Highland capital has earned annualized return of close to 20% since June 2014.
James Dondero said that Highland Capital plans to hold what it had in the original bonds as they are looking forward to buying new issuance. He added that the team is optimistic about how Argentina has priced the debt and more importantly, where it is liable to trade, particularly in relation to other Latin Americans Sovereigns. According to Argentina finance ministry officials, Argentina plans to issue $11.68 billion bonds, and it will issue bonds with a maturity of 30, 10, and 5 years.
As described by Dondero, they viewed Argentina as a resource-rich country that was shrinking production and running down its foreign reserve. The view of Highland Capital interpretation ended up being correct, as the result, there was a need for an intermediate-term to settle debt default thus the bond trade was high.