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Pimco’s Bet On Argentine Bond Paying 75% Rate Flops On Peso Rout

FYI: Pacific Investment Management Co.’s decision to buy up almost a third of the world’s top-paying government bond came a cropper this week as the Argentine peso collapsed.

The debt securities maturing next June have fallen to a record low of 85 cents on the dollar from 104 cents last Friday. The notes pay a floating coupon tied to the benchmark interest rate. And while Argentina set its seven-day LELIQ rate at an all-time high of 75% on Tuesday, the peso’s tumble amid a shocking defeat in the primaries for President Mauricio Macri outweighed all other factors.
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