Debt has become a very reliable vehicle for earnings to COL Guru and Innovator, James Dondero. Argentina is now producing revenue and wealth for the clients of Highland Capital Management, founded and run by Dondero, with yields in the first quarter of 2016 of over 7% from over $11 Billion in bonds sold on the International Bond Market by the debt managers of Argentina’s economy. With maturities set to end their debt by 2033, debt consumers are lining up to buy, buy, buy.
“Our initial impression in 2014 was something had to give,” James Dondero recalls with anticipation and conviction. “It was a resource-rich country shrinking their production and running down their foreign reserves. The consequences of being a financial pariah, horrific tax policies, price manipulations and massive subsidies were reaching an inflection point. Our view, which I think was a good interpretation and ended up being correct,” (not unusual for Jim’s insights in the debt markets, with his 30 years of successful credit management experience) “was that there was an intermediate-term inevitability to settle with holdouts that would have the bonds trade higher.”
As president and co-founder of Highland Capital, working with debt loans is something he was born to do with a knack that is second to none. Jim Dondero, after all, with the collaboration of the Highland Capital co=founder Okada, invented the CLO or the Collateralized Loan Obligation. Making the most adept maneuvers in this market is like being on cruise control for Dondero. He has been pursuing these types of gains since he started managing debt portfolios just after earning his CFA and CMA from the University of Virginia and the McIntire School of Business in 1984. He managed these types of portfolios for Morgan Guaranty, American Express and various large companies such as MGM Studios and other healthcare organizations. He always seemed to find the best moments to hold such debt loan instruments and then which ones needed to be sold and when to do it to earn great dividends for his investors.
With successful CLO portfolios for Highland Capital Management’s holdings of over $19 Billion, Dondero and his group are sitting very comfortably in the ready position to make gains in increments of five, ten and thirty year maturity points on the Argentina bond sales for his well oiled credit asset hedge fund earnings machinery. There is no other more astute engineer for the high yield future in the arena of CLO and credit asset management than Jim Dondero.
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