We do, however, know a little bit about Argentina’s two latest dollar bond issues. (I downloaded more detailed data from the Mecon website.) In 2010, the government issued $950 million in a seven-year bond issue. The coupon was 8.75%, paid twice a year. The bond currently trades at almost 93¢. (Although Puente states that it is currently trading at 97.8¢.) In 2011, the government issued a further $3.5 billion in 7-year dollar bonds, this time with a 9% coupon. (See below.)
At 8.75% over ten years, Repsol would eventually receive $9.38 billion on a $5 billion bond issue. At a discount rate of 8.4% (the rate at which Repsol would be indifferent between waiting on its modal expected ICSID compensation and taking $5 billion now) the bond would have a present value of $5.11 billion.
Or Repsol could sell it for somewhere between $4.65 billion and $4.89 billion, although it should be kept in mind that the market is not particularly liquid, especially if the bonds are governed under Argentine rather than New York law. Repsol would have to take some time to unwind its position.
Either way, it looks like the fact that Argentina will pay in bonds is not a dealbreaker. Moreover, it is possible that the face value of the bonds will ultimately clock in a little bit more than $5 billion or that the coupon will be higher than 8.75%. As long as Repsol can sell its bondholdings within a reasonable amount of time, it should be protected.