Argentina rewards bond investors who braved crises with 135% return

New York

INVESTORS who bought Argentina's bonds in the aftermath of its 2001 default and had the stomach to hold on for the next decade are about to be rewarded with a 135 per cent return when the securities mature next week, according to Bank of America Corp.

The US$5.7 billion of 10-year notes are scheduled to be paid off on Monday, handing investors more than the average 93 per cent gain for emerging markets, after years of turmoil generated by lawsuits with creditors, a plummeting currency, soaring inflation and a government that allied itself with Hugo Chavez.

When things looked diciest, Venezuela's socialist president even stepped in to buy a portion of the notes to aide Argentina.

The bonds traded at 103 cents on the dollar on Thursday, from a low of 18 cents in 2008 and 69 cents just three years ago, when investors grew concerned the country was running out of dollars and would opt to repay its local debt with…