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

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Miller, Marcus and Thomas, Dania (2006) Sovereign debt restructuring : the judge, the vultures and creditor rights. Discussion Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.757).

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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.

Item Type:

Working or Discussion Paper (Discussion Paper)

Subjects:

H Social Sciences > HG Finance
J Political Science > JX International law

Divisions:

Faculty of Social Sciences > Economics

Library of Congress Subject Headings (LCSH):

Debts, External -- Argentina, Debts, Public -- Argentina, Debt relief -- Argentina, Argentina -- Economic conditions -- 1983-

Series Name:

Warwick economic research papers

Publisher:

University of Warwick, Department of Economics

Place of Publication:

Coventry

Official Date:

August 2006

Dates:

Date	Event
August 2006	Published

Number:

No.757

Number of Pages:

Institution:

University of Warwick

Status:

Not Peer Reviewed

Access rights to Published version:

Open Access

Funder:

Economic and Social Research Council (Great Britain) (ESRC), University of Warwick. Centre for the Study of Globalisation and Regionalisation (CSGR)

Grant number:

RES-051-27-0125 (ESRC)

Adapted As:

Marcus Miller, Dania Thomas. (2007). Sovereign debt restructuring: the judge, the vultures and creditor rights. The World Economy 30(10), 1491–1509

Related URLs:

Other

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