Highland Capital Sets Its Sights on Argentina Bonds

As Argentina prepares to raise approximately $12 billion with the issuance of bonds, investors are planning to buy in. One of the most prominent of these, Highland Capital, has indicated its plans to buy large amounts of this debt. This information comes via a Bloomberg press release in which Highland’s president, James Dondero, whose company is already a holder of some of Argentina’s previous bonds with a 2033 due date, revealed plans to further invest in the country as it reenters the bond markets.

James is optimistic about where the new issue bonds are likely to trade as Argentina seeks to pay out settlements with its holdout creditors. It’s expected that purchasers of the country’s debt will hold their positions and continue to invest as it moves out of default. Argentina’s bonds will be issued in the middle of April 2016 and will yield between 7.5 and 8 percent. Bonds will be sold at maturities of 5, 10, and 30 years.

The financial outlook for Argentina has been more positive since newly elected president, Mauricio Macri, has begun work to ingratiate his country to international markets. The nation is emerging from the effects of its debt default in 2001 that left it effectively barred from international markets. President Macri’s policies seek to undue the that of the previous president who reneged on the nation’s obligations to pay creditors in 2014.

Highland Capital is set to reap significant returns as the political groundwork has been laid for the country to pay its restructured debt. James Dondero’s asset management firm has already seen tremendous gains from the 2033 bonds it bought in 2014. Jim says his company has plans for additional investment in Argentina beyond bonds and may open an Argentina fund.

James Dondero, who goes by Jim, is the co-founder and president of Highland Capital Management. He has accrued over 30 years of investment experience dealing in both credit and equity. The Dallas-based company has been at the forefront of the creation of the Collateralized Loan Obligation market and the establishment of credit market tools for investors.

In addition to heading Highland Capital Management, Jim is Chairman of Cornerstone Healthcare, CCS Medical, and Nexbank. He sits on the board of both American Banknote and MGM studios. Mr. Dondero is also a philanthropist who has backed efforts in education, foreign affairs, and veteran’s affairs.

The original press release can be found here.