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(Bloomberg) -- The dead-cat bounce has arrived for Argentina.After a brutal three-day sell-off that saw average yields spike to 21% and an implied probability of default gauge surge above 80%, investors finally found prices cheap enough to begin taking risk in the battered credit.The peso gained 6% to 57 per dollar in Buenos Aires Thursday. The extra yield investors demand to own government debt over U.S. Treasuries narrowed 1.8 percentage points to 17.73, the highest in emerging markets, while bonds jumped as much as 8%. Still, bonds are trading between 47 and 57 cents as the market reassessed the chances of repayment under a potential opposition administration. The benchmark Merval stock index also rose today.“Risk-reward is attractive,” said Shamaila Khan, the head of emerging-market debt at AllianceBernstein in New York. “The risk of restructuring is not insignificant if the economy continues to deteriorate, but there will be strong incentives for any new administration to avoid that.”Analysts and money managers including Dupont Capital Management and Barings LLC are starting to glimpse a silver lining. While the political outlook after the upset in the primary election on Aug. 11 that sparked the market carnage hasn’t changed much, some signs of cordiality emerged between President Mauricio Macri and his front-runner opponent Alberto Fernandez.Fernandez, who took a commanding 15-point lead in the primary ahead of Oct. 27 elections, spoke with Macri on Wednesday. An economist close to the leftist candidate vying to unseat the market-friendly administration also made encouraging comments about maintaining monetary policy, fiscal discipline and seeing the current exchange rate as being fair value.Buying BondsYong Zhu, who helps manage $10.8 billion at DuPont in Wilmington, Delaware, says that he’ll gradually start increasing his Argentine bond exposure because the debt is simply too cheap to ignore.“The market is pricing a pretty significant risk of default in the near future,” Zhu said in an interview. “But I don’t think they’re going to default right away.”Stocks may also be on course to return to levels closer to at least those earlier this year, said Chelsea Rodstrom, an emerging-market analyst at Global X, a unit of Mirae Asset Global Investment. Macri’s policies will stay in place at least until the election, and improved data as the economy emerges from recession may also buoy the market, the New York-based analyst said in an interview.“There is certainly a buying opportunity,” she said. “It seems like markets might be overreacting to what’s going on in Argentina and not looking toward the longer term.”Valuations look cheapest in industries such as energy, banking and utilities, she said. A good soy and corn harvest will also bode well for the economy, while trade tension between the U.S. and China could give Argentine farmers the chance to compete more aggressively in the global market, Rodstrom said. The Merval plunged by 48% on Monday in dollar terms.Peso PotentialAs for the peso, Ricardo Adrogue, head of global sovereign debt at Barings in Boston, Massachusetts, said he’s “comfortable” with the overweight stance he began in April, though he’s not adding to it because the market’s too illliquid.“It’s incorrectly perceived that Fernandez will let the currency depreciate at the expense of very high inflation,” said Adrogue, who helps oversee $9 billion in emerging-market assets.Argentina has more than $60 billion in foreign reserves, and Cristina Fernandez de Kirchner, Alberto Fernandez’s running mate, “has shown willingness to use it in the past” to ease currency pressure, he said. Should Fernandez win the presidency, Adrogue expects the currency to stabilize.(Updates with investor comments in fourth, seventh paragraphs)\--With assistance from Karina Montoya.To contact the reporters on this story: Daniel Cancel in Sao Paulo at email@example.com;Justin Villamil in Mexico City at firstname.lastname@example.org;Sydney Maki in New York at email@example.comTo contact the editors responsible for this story: Julia Leite at firstname.lastname@example.org, Alec D.B. McCabeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- A hedge fund that filed a lawsuit seeking to have $14.3 billion of Illinois bonds invalidated in court stands to reap enormous profit if the case succeeds and the state defaults on the debt, Nuveen Asset Management LLC and AllianceBernstein LP alleged in a court filing.New York City-based Warlander Asset Management purchased credit-default swaps that will pay off if the lawsuit causes a default, according to Nuveen and AllianceBernstein, which together own about $2 billion of Illinois bonds, including those challenged in the case.“Permitting activist investors to litigate against the validity of widely held municipal bonds based on their credit-default swap bets could introduce a significant destabilizing force into the municipal markets and harm investors and government entities alike,” Nuveen and AllianceBernstein said in a brief filed Friday in Illinois Circuit Court.Warlander said in a filing Tuesday that there’s nothing improper about an investment firm having a financial interest in litigation and called the funds’ friend of-the-court brief an "unjustified attack." The filing didn’t provide details about the nature of that financial interest.Warlander and the chief executive officer of the Illinois Policy Institute, a conservative think tank, sued Illinois Governor J.B. Pritzker on July 1, saying the state’s 2003 pension bonds and 2017 debt sold to pay bills were deficit financings prohibited by the state constitution. Both issues were done before Pritzker took office this year.Warlander, which owns $25 million of Illinois general-obligation bonds that would be more secure if the firm succeeded in having the other securities invalidated, disclosed in a footnote in its complaint that it also had a “separate financial interest” in the litigation. That separate financial interest involves credit default swaps “well in excess of its nominal $25 million bond position,” Nuveen and AllianceBernstein said, without providing specific evidence.Warlander’s financial interest has no bearing on a Thursday hearing in circuit court of Sangamon County on whether John Tillman, the CEO of the Illinois Policy Institute, has standing to file a taxpayer complaint, the hedge fund said in its court filing. Although Warlander is a plaintiff in the case it didn’t petition the court to file a taxpayer complaint.“Though Warlander’s motives are not an issue, they are of no malice to the state. A complaint can hardly be ’malicious’ when its goal is both to require the state’s elected officials to act within the bounds of its constitution and to relieve the state of $20 billion in debt service obligations -- which would clearly benefit the state."Nuveen and Alliance Bernstein want the court to require Warlander to disclose the nature, terms and extent of its separate financial interest “so that the court can determine whether the petition is filed not to vindicate the interests of Illinois taxpayers but to allow an out-of-state hedge fund to create a default and profit from the swaps,” Nuveen and AllianceBernstein said.If Warlander’s true financial interest lies in creating a default so it can profit, then the lawsuit was filed with a “malicious or ulterior purpose” and the court should reject it, Nuveen and AllianceBernstein said.A credit-default swap contract is similar to insurance on a bond, but the purchaser doesn’t need to own any of the underlying debt to buy one. The swap purchaser can buy the bonds after they default and then tender them to the swap seller to get full payment on the contract.Credit-default swaps on Illinois general-obligation bonds exceeded $300 million at the end of June, according to International Swaps and Derivatives Association data. The cost to protect against losses on Illinois bonds for five years has jumped 41 basis points since July 1 to 186.5 basis points, or $186,500 annually for every $10 million insured, according to IHS Markit.The lawsuit has already impaired Illinois bond prices and made it difficult for the state to issue new securities, the funds said.The spread on Illinois’ 2003 and 2017 general obligation bonds rose to 182 basis points from 134 basis points, and the trading price dropped relative to the broad market, after the Warlander suit was filed, according to Nuveen and AllianceBernstein. Benchmark Illinois bonds are trading with a 3.03% yield, the highest among 20 states tracked by Bloomberg, and about 172 basis points more than top-rated debt, according to Bloomberg data.Holders of the bonds had a paper loss of $574 million after the lawsuit was filed, the funds said. Illinois postponed until the fall a general-obligation bond sale to pay more bills.Warlander’s suit is based on an incorrect reading of the Illinois constitution, Nuveen and AllianceBernstein said. Article nine, section nine of the constitution says the state may issue long-term debt only to finance “specific purposes” if approved by three-fifths of the legislature or by popular referendum.A “specific purpose” refers to a description, not a limitation on the power to incur debt, the funds said. The three-fifths vote requirements acts as a limitation on the ability to borrow.Using bond money to cover general expenses, speculate in the market, or pay past-due bills isn’t a "specific purpose" for incurring state debt, but rather another name for deficit financing, Warlander said in its original complaint.The drafters of Illinois’ 1970 Constitution didn’t intend to allow the state to incur unlimited general obligation debt for any purpose, the hedge fund said.(Adds price of Illinois credit default swap in 12th paragraph.)To contact the reporter on this story: Martin Z. Braun in New York at email@example.comTo contact the editors responsible for this story: Elizabeth Campbell at firstname.lastname@example.org, William Selway, Christopher MaloneyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
NEW YORK , Aug. 12, 2019 /PRNewswire/ -- AllianceBernstein L.P. ("AB") and AllianceBernstein Holding L.P. ("AB Holding") (NYSE: AB) today announced that preliminary assets under management ...
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
TD Ameritrade (AMTD) appears to be a promising bet, riding on robust fundamentals and long-term growth opportunities. However, elevated expenses are a concern.
When it signed a lease more than two years ago, the giant fashion chain became the first tenant to commit to the project.
A health care IT staffing and consulting firm is set to open an office in Nashville — but not for the reason most would think. Optimum Healthcare IT is launching OptimumTech — a new, dedicated IT staffing division — in Music City, according to a news release. The division will focus on providing project managers, software developers, business analysts and other IT positions across industries, not just in health care.
Zacks.com featured highlights include: Marine Products, Amedisys, Universal Forest Products, NVR and AllianceBernstein
CFO of Alliancebernstein Holding Lp (30-Year Financial, Insider Trades) John C Weisenseel (insider trades) sold 32,723 shares of AB on 07/30/2019 at an average price of $29.61 a share. Continue reading...
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of AllianceBernstein L.P. New York, July 26, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of AllianceBernstein L.P. and other ratings that are associated with the same analytical unit. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
In March, HCA Healthcare Inc. became the first major private-sector donor to a citywide program designed to better train Nashville's workforce.
GAAP Diluted Net Income of $0.54 per Unit Adjusted Diluted Net Income of $0.56 per Unit Cash Distribution of $0.56 per Unit NEW YORK , July 25, 2019 /PRNewswire/ -- AllianceBernstein L.P. ("AB") ...