Argentinian naval vessel held by Ghanaian court over bond default…

There’s a couple of things worth noting about economics this weekend, but since I’m short of time, I’m starting with the simplest and possibly the least worthy of note:

…the ARA Libertad, a navy training ship seized in Africa nearly three weeks ago as collateral for unpaid bonds dating from the South American nation’s economic crisis a decade ago.

Hmmmm, yep. Ten years ago and Argentina’s default is still haunting even their armed services because the bondholders haven’t gone away you know.

The Ghanaian judge acted on a claim by NML Capital Ltd., which is based in the Cayman Islands. Its owner, billionaire investor Paul Singer, leads a group demanding payment in full, plus interest, for dollar-based Argentine bonds bought at fire sale prices after the country’s economy collapsed a decade ago, forcing a sharp devaluation of its currency.

The vast majority of bondholders accepted about 30 cents on the dollar years ago, which is roughly what the holdouts led by Singer initially paid for the bonds.

NML Capital has said Argentina owes it about $350 million, and offered to let the ship leave if Fernandez’s government put up a $20 million bond to be forfeited.

The real problem with a default is not just it’s own disorderliness, but the fact that it does very little to help the country that got into its mess in the first place to act with any social authority to put it right afterwards.

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