Sovereign debt restructuring: the Judge, the vultures and creditor rights

Marcus Miller and Dania Thomas

No 269650, Economic Research Papers from University of Warwick - Department of Economics

Abstract: What role did the US courts play in the Argentine debt swap of 2005? What implications does this have for the future of creditor rights in sovereign bond markets? The judge in the Argentine case has, it appears, deftly exploited creditor heterogeneity – between holdouts seeking capital gains and institutional investors wanting a settlement – to promote a swap with a supermajority of creditors. Our analysis of Argentine debt litigation reveals a ‘judge-mediated’ sovereign debt restructuring, which resolves the key issues of Transition and Aggregation - two of the tasks envisaged for the IMF’s still-born Sovereign Debt Restructuring Mechanism. For the future, we discuss how judge-mediated sovereign debt restructuring (together with creditor committees) could complement the alternative promoted by the US Treasury, namely collective action clauses in sovereign bond contracts.

Keywords: Financial Economics; International Development (search for similar items in EconPapers)
Pages: 27
Date: 2006-08-08
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Sovereign Debt Restructuring: The Judge, the Vultures and Creditor Rights (2007)
Working Paper: Sovereign Debt Restructuring: the Judge, the Vultures and Creditor Rights (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269650

DOI: 10.22004/ag.econ.269650

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