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.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Calm after the storm

Sovereign debt restructuring has been hotly debated for years. Paradoxically, though, two of the elements most fought over – collective action clauses and exit consents – seem now to have been accepted with equanimity. • Felix Salmon reports

AFTER MANY YEARS of noisy and contentious debate about mechanisms for restructuring the bonds of troubled emerging-market sovereign debtors, matters came to a head in April. Mexico retired the last of its dollar Brady bonds and issued $2.5 billion in new global bonds with collective action clauses (CACs). Uruguay announced that it was looking to issue billions of dollars of new bonds with CACs, as part of a restructuring effort. And in the US, Treasury secretary John Snow administered the coup de grâce to the IMF's plans for an international sovereign bankruptcy court enshrined in international law.

The reaction to these events was astonishing: nothing happened. Press conferences weren't called, outraged op-ed columns didn't run, the beginning of a new era in crisis resolution was not proclaimed. Admittedly, there was a small war on at the time.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


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