As Argentina's international investors prepare themselves for one of the most gruelling sovereign debt workouts ever, change is already in the air. Yet that change, which could involve a new set of rules for dealing with sovereign debt collapse, will come too late for Argentina - a country that comprises some 25% of emerging market debt.
Judging from the market's reaction so far, one might think so what? After all, emerging market debt on average has actually contracted 300 basis points to 400bp since Argentina became the world's largest ever sovereign debt default on November 2, 2001. Just two months later, Brazil and Mexico brazenly issued bonds totalling $2.5bn - and investors lapped them up.
