Now that the flood of distressed debt has slowed to a trickle, vulture capitalists are having to look far and wide for their next big score. They say necessity is the mother of invention, and that certainly appears to be the case with Ice Canyon's new investment strategy. Perhaps encouraged by Elliot Capital Management's audacious seizure of an Argentinian naval ship, Ice Canyon wants to go big on defaulted Cuban debt.
Let me put this in perspective for a moment. Ice Canyon chief Nathan Sandler isn't talking about buying current Cuban debt. He's talking about buying ancient Cuban debt (call them Batista Bonds, for want of a better term) which basically suffered default by firing squad. The strategy (I guess) is to hopefully collect if and when Cuba ever normalizes relations with the US.
I'm curious as to what $1 million worth of defaulted Batista Bonds issued in 1958 would be worth today. Thirty-six bucks? Fifty? How would you ever go about collecting on it? Well, we may never know because as yet the US government won't allow him to make the buy (the whole Trading with the Enemy Act or something). He's currently appealing the decision, but it doesn't look good.