While scores of Argentine issuers queued up before investors to restructure their debt after the catastrophic devaluation of December 2001, the province of Salta kept making payments on its $234 million, 11.5% 14-year securitization of oil and gas royalties. And there wasn't only peer pressure bearing on Salta. The province also faced the sovereign's own restructuring process, capital controls imposed by the Central Bank, and the federal government's cap on gas prices, which went a long way in eroding the royalties flowing into the structure.
"We could have jumped on the bandwagon" and defaulted, said Gabriel Chiban, secretary of international finance for the province. "But we understood the value in continuing to pay."