Next month Argentina will be making a much anticipated return to the international bond market, and according to James Dondero, Highland Capital Management is one of the buyers. Dondero serves as the president and co-founder of the financial firm based in Dallas, Texas. The firm handles roughly $19 billion which includes credit hedge funds and emerging market credit funds, and they are looking to buy large amounts of securities when Argentina re-enters the financial game.
Before they altered their portfolio earlier this month, Highland Capital was one of the biggest holders of Argentina’s $4 billion notes that will become due in 2033. The fact that such a reputable firm is looking to invest is a great sign for Argentina as the company tries to unload a large amount of debt to help pay for their debts with creditors that held out on making a settlement. Dondero stated that on top of holding on to what they already have, Highland Capital intends to buy some of the new issuances and feels optimistic that Argentina will price the debt at a great trading price. As things stand now, Highland Capital is set to be one of the biggest winners when the ban is lifted that prevented the country from paying its restructured debt. The fund purchased a large amount of Argentina’s bonds in June of 2014 when they were trading in the mid-70’s. Since the original purchase, Highland has earned annual returns on these bonds that are close to 20 percent. These bonds are currently trading at around $117.
Dondero is hoping to lead his company in a winning payout with these bonds, and looking at his stellar reputation, it’s not hard to imagine he may be right. He has racked up more than 30 years of experience in the credit and equity market, most of which was focused mainly on high-yield and distressed investing. He has led Highland Capital to be a pioneer in the development of Collateralized Loan Obligations as well as developing credit oriented solutions for investors around the world.
Prior to Highland Capital, Dondero served as Chief Investment Officer for GIC, a subsidiary of Protective Life where he built over $2 billion in AUM in his 4 years with the company. He also worked as a Corporate Bond Analyst as well as a Portfolio Manager for American Express after his first job with Morgan guaranty where he worked in the training program. Dondero currently works and runs his company, Highland Capital Management, as well as serve as Chairman of Cornerstone Healthcare, CCS Medical, and Nexbank.
More information on Highland Capital and their intentions and hopes for Argentinian bonds hitting the market can be found here.