Highland Capital Management Targets the Distressed Argentina Bond Issue

Argentina has finally decided to enter into the global capital markets after brokering a deal with bondholders who were preventing the country from issuing the debt in the world market. The standoff was due to the previous policy as put forward by the former president Mauricio Macri. However, despite the battle with bondholders which has forced the financial institutions to shy off from the new debt, Highland Capital Management has expressed its desire to lead as the buyer in the new bond issue. The company oversees about $19 billion and is still looking to buy “significant amounts” of the new securities offered by Argentina.

The Highland Capital Management plan to invest is being viewed as a good sign for the country as it attempts to attract investors to the new bond issue to sell an unprecedented amount of debt to pay its creditors. The current distressed debt is what James Dondero is experienced for, but it has put the country in an awkward situation as it plans to exits default. According to James Dondero, HCM’s co-founder and president, the company plan to hold what it has right now and still look to buy the new issuance. He said that the firm is optimistic that Argentina about the price of the debt and where it is likely to trade.

The expectations at the moment are that Argentina will place its bond at the yield of 7.5% to 8% which could fall to 6% based on the outlook of the country. HCM is an investment organization that has experienced steady growth in the last few years. Recently, the president of the company, Mr. Dondero was forced to hire a new executive to head the institutional products division in the company. The position was necessary to meet the growing demands of the market, especially the portfolio risk management across the firm.

James has more than three decades of experience within the credit markets and currently oversees all the investments strategies of the company. Jim Dondero works in close collaboration with his co-founder Mark Okada to manage the $21 billion in assets under management and is being credit for being one of the earliest pioneers in the Collateralized Loan Obligation (CLO) when he launched the first non-bank CLOs in 1996.

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