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Argentina is a peaceful country with a growing, middle income economy and a highly educated workforce. And yet, among many international investors, a proposal for an investment in Argentina raises immediate eyebrows. This is in contrast to the enthusiasm with which investments in neighboring countries, such as Chile and Brazil, are frequently embraced.

For Argentina, the discomfort of international investors with the country has been expensive. Argentina's government is largely locked out of international capital markets. Companies doing business in Argentina generally pay high yields throughout their capital structures, whatever their financial condition. Frequently, the stocks and bonds of healthy and profitable companies are priced as those of companies undergoing financial distress.

International investors can take advantage of the country-specific...

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