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 Cookiesbefore 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.

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. Even so, the equanimity with which this new world order was accepted stood in stark contrast to the ferocity of the debate surrounding its inception.

Uruguay's use of CACs seems to have set a precedent for making them standard practice. Chilean finance minister Nicolas Eyzaguirre, for example, says that "countries with investment-grade ratings benefit from CACs without paying an extra amount", which seems like a clear statement that if and when Chile comes to market again, it will include CACs in its bonds.

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?