Exit consents pose threat to creditors’ rights

If bondholders’ unhappiness at the way they were treated in Pakistan, Ecuador and Ukraine boils down to the fact that they perceive that creditors’ rights were not respected, then the most egregious example of those rights being demolished came in the case of Ecuador, with the inclusion of exit consents in the exchange offer. Now that they have been used successfully once, there is a presumption among a lot of market participants that they will be used again.