http://news.ft.com/cms/s/dd900ed6-3c1c-1...000e2511c8.html

"This is more than a quirky exercise. Mr Berry sees a big potential pay-off at the end. He believes that Cuba, one of the last bastions of communism, “will be a dynamic economy one day”. He says: “It represents substantial long-term value.”

He is among a small number of investors who seek out distressed or highly illiquid debt for profit and diversification. Most of these are defaulted syndicated loans that countries, often with politically isolated regimes, either have refused or been unable to service. They take up the most exotic corner in the emerging market debt world and make up only a tiny part of the international bond market.

But, like distressed corporate debt, investments in debt owed by so-called pariah nations – including Cuba, North Korea and Sudan – can be bought for bargain prices and can offer spectacular returns. If these hardline regimes were to come out of the political cold sooner than expected, their debt prices would rise sharply ahead of either debt restructuring or debt-for-equity swaps."

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