(Bloomberg) -- Investors holding debt protection for Argentina are set to share compensation of some $1.5 billion after the South American nation defaulted on its foreign debt for a ninth time last month.
Firms holding the country's credit-default swaps will receive about 68.5% of the amount covered by the instruments, according to the final results of an auction to settle the contracts on Friday. They get triggered when a borrower fails to pay its debt. Investors use the instruments to make negative bets on borrowers or as hedges for bond investments.
Argentina, which has a long history of defaults, is negotiating a $65 billion restructuring on its foreign debt. President Alberto Fernandez's government extended its offer deadline until June 19, giving officials another week to account for new feedback from creditors. Given that the nation is already in default, there are no major implications for further extensions.
READ: Argentina Default Prompts a Paul Singer Sequel in CDS Decision
Some of Argentina's largest creditors include Pacific Investment Management Co., Franklin Templeton, BlackRock Inc. and Ashmore Group Plc, according to data compiled by Bloomberg. Not all bondholders hold the derivative contracts.
©2020 Bloomberg L.P.
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