"This is not really a story about a country with a fraught financial history willing to issue 100-year debt. Rather, it is a story about a country able to issue 100-year debt because global investors were willing to purchase $2.75 billion of it. Indeed, they were eager to do so: total tenders for the bonds were 3.5 times the volume sold.



At the end of the day, this is not about the character of the country, the maturity of the debt, or the size of the issue. It is about the coupon rate on the offering, 7.9%"



I think it's important to explicitly note some basic finance, time value of money here. At 7.9% interest, even if these bonds 100% default after just 20 years, using my trusty HP 17Bii financial calculator, just collecting that $7.90 on a $100 investment for 20 years gives you the equivalent of a 4.8% return, which is good for today. If they last for 30 years, you end up with a 6.8% return, which is excellent. And what's that $100 principle worth today, if you discount it at 7.9% for 100 years? Five cents.



Obviously, a world class economist like Carmen Reinhart knows this, and learned it long ago, but it's worth pointing out explicitly.



I think one of the reasons Argentina might have to do this is to make it look like they are a stable well-run country, that can be relied on 100 years from now. Of course, if it's too far from the truth, it can make them look unrealistic and unserious.