Two semi-official organizations financially tied to the Yokohama Municipal Government are having difficulty recovering the principal on their combined 170 million yen investment in Argentina government bonds because the country defaulted on its debt in December, according to the municipal government.
The two are Kohoku New Town Seikatsu Taisaku Kyokai, an organization in charge of research and public relations for regional development, and Yokohama Kotsu Kaihatsu, which builds and manages parking lots and shops for rent, the city said.
Kohoku New Town bought 150 million yen worth of Argentine government bonds between December 1999 and April 2001, while Yokohama Kotsu Kaihatsu bought 20 million yen worth in September 2000, it said.
In addition, the municipal government found that Kohoku New Town has invested 740 million yen, or 95 percent of its principal assets, in the bonds of Argentina and four other countries.
"We have placed priority on getting interest (from the investments) and did not adequately take into account the risks (involved in buying the bonds)," reckoned Masako Nakanishi, head of Kohoku New Town. She said her organization will shift to a policy of investing in Japanese government bonds and local government bonds.
Other semi-official entities dependent on public funds also suffered from their exposure to the Latin American country, which is $132 billion in debt.