Sovereign Debt

The Emperor's Old Bonds

02/25/20

Inspired by Tracy Alloway's recent piece on antique Chinese bonds (here), a group of my students has gone deep down the rabbit hole of the question of how one might recover on them (or, from the Chinese government’s perspective, how one would block recovery).  If I’m reading Michael, Charlie and Andres correctly, they think that the probability of recovery via litigation is near zero on almost all of the antique Chinese bond

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Venezuela, Lebanon, and Tools to De-Fang “Rush-In” Creditors

02/17/20

A follow-up on my exchange with Mitu (parts 1, 2, 3, and

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Pre-1949 Chinese Bonds: How Much of a Litigation Threat Do They Pose?

02/15/20

As part of the international debt class that I'm teaching this term with Steve and Lee, we spent a couple of sessions discussing the various lawsuits that have been brought in US courts over China's defaulted pre-1949 debt.

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Judgments > CACs!!!!

02/13/20

There is a subtext to my recent exchange with Mitu (here, here, and here) about whether a judgment-holder is bound by a subsequent vote to modify a bond’s payment ter

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Judgments > CACs

02/12/20

Mitu’s post from two-days ago frames an important question. An investor holds a defaulted sovereign bond that includes a collective action clause, sues, and gets a final judgment for the full amount of the outstanding principal. Later, a majority of the remaining bondholders vote to restructure the bond’s payment terms—say, by accepting a 50% haircut. Is the judgment-holding investor somehow bound by this decision?

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Do Judgements Trump CACs?

02/10/20

(Thanks to Steven Bodzin of REDD Intelligence for flagging this matter; he has an aptly titled piece on this out today “Venezuela Bondholders Seek Judgement Ahead of Collective Action Clause Activation”).

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216 Jamaica Avenue and the Prospect of Breathing Life Into Antique Chinese Bonds

02/09/20

One of the more fun discussions we have had in my international debt class this term has been the question of whether a clever plaintiff's lawyer might be able to breathe life into defaulted Chinese bonds from the period 1911-1948. (Our thanks to Tracy Alloway's delightful piece in Bloomberg on this matter (here)).

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The Bajan Debt Restructuring - 2018-19

02/06/20

Following in the footsteps of their mammoth restructuring of Greek Debt in March 2012, Andrew Shutter, Jim Ho, Lee Buchheit, and their team utilized the same "local law advantage" to design the restructuring of the Bajan debt in 2018-19.  Andrew, one of the gurus of the sovereign debt field, has just put up a super paper on this (here). The paper describes not only how the restructuring was engineered, but also the ways in which the strategy utilized was different from that used for Greece.

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Elliott Rocks (Strikes?) Again

02/06/20

Holdout hero Elliott Management, the king of holding out until it gets what it wants, scored itself a nice Christmas bonus. The hedge fund won a long game of chicken with Ireland’s government over junior bonds issued by Anglo Irish Bank by getting its money back in full.

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