Goldman Says Go Long Argentina Bonds, Sees ‘Constructive’ Steps

Goldman Sachs added Argentina’s sovereign bonds to its basket of preferred emerging-market distressed credits to go long into next year, noting that recently-announced fiscal reforms are a positive development.

• While dollar bonds have rallied following November’s runoff vote, debt trading at around 37 cents on the dollar still offers significant potential upside, strategists including Kamakshya Trivedi and Nathan Fabius write in note
  • Goldman’s NPV haircut model points to a recovery value of around 45 cents, assuming a currency adjustment to USD/ARS of about 2,250 over the next year
• “Implementation risks for policy reform are higher than in most places, and ...