Argentine Credit Indicator

A delegation from Argentina is heading to Europe and the US this week to pitch a debt swap that would extent maturities on $2.3bn inflation-linked bonds. It will be interesting to watch how this is received by creditors. In 2005, many investors rejected Argentina's debt restructuring, leading to lawsuits that have limited Argentina's access to debt.

Adam Smith's statement, "When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and compeltely paid," applies especially to Argentina. Argentina has defaulted on its debt 6 times since 1800 (1830, 1890, 1915, 1930s, 1982, 2001). If the market is willing to lend money to Argentina, then that should be a good indicator that credit is flowing at normal levels.