The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Collective indecision

Collective action clauses have been inserted into bond documentation for nearly as long as bonds have existed. They're still completely standard in bonds issued under London law, and have never been an issue when those bonds come to be priced.

Even bonds issued under New York law include collective action clauses which allow varying percentages of bondholders to change just about any part of the bond documentation, although the payment terms are always excluded.

But despite the fact that the G7 has been pushing for years for CACs to be introduced into all sovereign bonds, it has never happened. The G7 countries themselves have now announced that they will include CACs in all of their own foreign issuance but still no emerging-market sovereign borrower has taken the plunge with respect to any bond issued under New York law. It seems as though there's something of a disconnect between the senior officers of the major investment banks and the people heading their syndicate desks. While the former have largely embraced CACs at this point, the latter still advise their sovereign clients not to be the first country to attempt the introduction of new, non-standard clauses.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree