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Source: Bloomberg
By: Carolina Millan

The most surprising thing about Argentina’s record bond sale isn’t that it issued $16.5 billion of debt while still in default. It’s that the country could have sold even more.

The bonds rallied in early trading, signaling strong investor demand and a turnaround in sentiment after Argentina’s $95 billion default in 2001 set off more than a decade of litigation and isolation from global capital markets. Finance Minister Alfonso Prat-Gay couldn’t help gloating a bit, telling reporters that with orders from more than 600 investors he could have easily issued double the amount.

The braggadocio is excusable when considering where Argentina was just a few months ago, burdened by anemic economic growth, inflation estimated at 30 percent and an overvalued currency that discouraged investment. The comeback was set in motion when President Mauricio Macri took office in December vowing to reignite the economy and settle lawsuits with holdout creditors from the 2001 default that had caused the country to once again miss payments, this time on restructured notes.