Venezuelan President Hugo Chavez said investors should stay away from “poisoned” U.S. Treasuries and can instead earn interest from “very good” Argentine bonds. Securities issued by Argentina, which in 2001 defaulted on $95 billion in foreign debt, pay attractive interest rates, Chavez said today in a speech to the National Assembly in Caracas. He said that Venezuela has already resold most of the bonds it bought from Argentina.
“I don’t recommend that anyone buys bonds from the U.S.,” Chavez said in
comments broadcast on Venezuelan state television. “The bonds that Argentina
sells on the international market are very good. They pay interest.”
Lawsuits by holders of defaulted Argentine debt prevent the government from borrowing money on international markets. In the latest bond ruling against Argentina, a U.S. judge said Jan. 9 that Argentina must repay as much as $2.2 billion to holders of about $16 billion of defaulted debt. Argentina’s default was the biggest ever, and holders of $20 billion of bonds rejected the government’s 2005 offer of about 30 cents on the dollar, the harshest terms in a sovereign default since World War II.
Argentina’s benchmark bond due in 2033 fell 0.5 cent to 32.5 cents on the dollar today, according to JPMorgan Chase & Co. The bond’s 22.84 percent yield is 19.84 percentage points higher than a 30-year U.S. Treasury.
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