Pimco Bet on Argentine Bond Paying 75% Rate Hit by Peso Rout

  • Peso slid to record low after Macri’s landslide primaries loss
  • Pimco had boosted its exposure to the bonds earlier this year
Amherst Pierpont's Morden Sees High Probability of Argentina Default
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Pacific Investment Management Co.’s decision to buy up almost a third of the world’s top-paying government bond hit a bump this week as the Argentine peso collapsed.

The debt maturing next June has fallen to a record low of 71 cents on the dollar from 104 cents last Friday. The notes pay a floating coupon tied to the benchmark interest rate, which stood at an all-time high of 75% on Tuesday. Yet the peso’s tumble after a landslide defeat in the primaries for President Mauricio Macri outweighed any yield on the debt.