Investing.com -- U.S. Treasury Secretary Jacob Lew hailed Argentina's return to global capital markets on Friday as the product of the recent election of president Mauricio Macri and the willingness of various political parties to work in collaboration, an impediment in several failed notable deals in the past.
Lew's comments coincided with Argentina's $9.3 billion payout to debt holders earlier on Friday, many of whom went years without receiving unpaid debts from the Argentine government. On Tuesday, Argentina sold $16.5 billion of sovereign debt in its first international bond sale since a highly-publicized default 15 years ago. Argentina received approximately $68.6 billion in offers during the bond issue, two-thirds of which came from U.S. based investors, Argentine finance minister Alfonso Prat-Gay said in a news conference earlier this week. According to Prat-Gay, the Argentine government had the ability to offer twice as much in sovereign debt at the auction.
"Argentina’s successful bond issuance and final settlement of the vast majority of the claims of its holdout creditors is a testament to the sea change in policy under President Macri," Lew said in a statement. "By taking decisive action to resolve a long-standing dispute, Argentina is turning a page on a difficult period of its history. Throughout my consultations with Finance Minister Prat-Gay, I have reiterated our admiration for the speed at which Argentina is moving to create more sustainable and inclusive economic growth, and to reconnect with the global economy and the world community."
Last week, a three-member U.S. Appeals Court panel upheld a previous ruling that paved the way for the bond issuance. In March, U.S. District Court judge Thomas Griesa dropped an order, which prohibited Argentina from making payments on restructured debt before repaying defaulted bonds. The ruling came one day before Elliott Management and three other hedge funds faced a deadline to meet the terms of a record $4.65 billion settlement the parties reached with Argentina in late-February.
In 2001, Argentina defaulted on nearly $100 billion in sovereign debt, which helped trigger a recession that pulled down South America's second-largest economy.
"It also is important to highlight the recent efforts that Treasury has led to improve the sovereign debt restructuring process. Treasury staff has worked closely with the international community to develop enhanced collective action clauses that should facilitate a more consensual, orderly, and market-based approach to any future sovereign debt restructurings," Lew added.
"We are pleased that many countries, including Argentina, have adopted the new model clauses. We encourage other nations to follow suit."