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The Thesis
Singer's Elliott Management bought defaulted Argentine government bonds at steep discounts and refused to accept the country's restructuring terms, fighting for full payment in courts for 15 years — and winning.
The Story
When Argentina defaulted on its sovereign debt in 2001, Paul Singer's Elliott Management purchased the defaulted bonds at pennies on the dollar. While most creditors accepted Argentina's heavily discounted restructuring offers (paying roughly 30 cents on the dollar), Singer refused and sued for full repayment plus interest. What followed was a 15-year legal battle that went all the way to the US Supreme Court.
Singer employed remarkably creative legal strategies, at one point even convincing a court in Ghana to seize an Argentine naval vessel. In 2016, Argentina finally settled with Singer and other holdouts, paying approximately $4.65 billion — a return of roughly 2,400% on Elliott's original investment. The trade demonstrated that tenacity, legal sophistication, and willingness to fight for contractual rights can generate extraordinary returns in distressed sovereign debt.
Key Insight
Contractual rights have value — the willingness to enforce them, even against a sovereign nation, can generate extraordinary returns for those with patience and legal resources.
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See how Glen Bradford applies these principles to his own investing. Long Fannie Mae & Freddie Mac junior preferred — conviction meets patience.