Argentina recently completed the largest sovereign bond restructuring in history. As soon as the government announced the results of its $100 billion tender in March 2005, editorial pages worldwide heralded a new era for sovereign debt, for the emerging markets and, occasionally, for international finance. Their views on Argentina's lessons were as disparate as they were definite. Some said the exchange would close the markets to middle-income countries. To others, it reaffirmed the markets' resilience. Some claimed it proved the need for statutory sovereign bankruptcy. Others said it clearly discredited the idea. Most spoke too soon. The deal took months to settle, and by the time it did, it had confirmed many presumptions about emerging-market debt and shattered none. The real lessons of Argentina's restructuring so far are more subtle and complex than the surrounding commentary. The default and the debt exchange were both points in a longer financial restructuring process that began before the default and will go on for years after the exchange. Argentina's unorthodox debt management immediately before and after the default is partly responsible for the outcome of the exchange. With $25 billion in defaulted debt still outstanding, Argentina's most important innovations may well be ahead
