Highland Capital Management: Investing In Communities and Countries

Under former President Cristina Fernandez de Kirchner Argentina has experienced financial difficulty. It all started in 2001 when the country defaulted for an approximate sum of $95 billion. Between 2001 and 2014 Argentina serviced its debt until the former President defied the U.S. court rulings and stopped payment to creditors. This led to Argentina being barred from the sovereign debt markets and unable to raise capital for its government functions and public projects. This restricted status lasted until recently when current President Mauricio Macri was elected on the platform to take Argentina in a new economic direction.

Under President Macri’s leadership Argentina quickly positioned itself to re-enter the sovereign debt market. Many might consider a distressed credit situation like Argentina to be something that investors would take their money and run from. This couldn’t be further from the truth though with many investors seeking to renew investments in Argentina once a U.S. court grants permission for it to restructure its debt and settle with its holdout creditors. Once allowed back into the credit market, Argentina intends to issue several bonds ranging from 5, 10, and 30-year instruments. The Latin American country hopes to pull roughly $12 billion in new funding through its new bonds.

James Dondero is one such investor who is looking favorably at Argentina. James is the co-founder of Highland Capital Management and current President of the business too. His unique experience with distressed credit has positioned the company perfectly for Argentina’s re-emergence into the international credit markets. The management fund holds a large sum of 2033 bonds from Argentina which will accrue a 20% annual return when they re-structure and settle the debt. In addition, Dondero is looking to create an Argentina Fund through Highland Capital Management. This fund would allow capital investment in the resource-rich country without going through their bonds or potentially in conjunction with investing in the bonds.

Beyond James’ involvement in Highland Capital Management, he is also known for his charitable investments. The Reserve Aid organization is one charitable group that has gained support from Jim and Highland Capital Management in recent years. They focus on financial aid for reserve service men and women. Veteran affairs are a key issue that Jim is involved in beyond his financial profession and is a cornerstone of Highland Capital Managements’ commitment to its community.

Source: Bloomberg

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