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Mark Weidemaier
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Mark Weidemaier and Mitu Gulati The Haitian Independence Debt of 1825 is perhaps the most odious in the history of sovereign debt. France agreed to grant recognition to the Haitian state in exchange for a massive indemnity payment, ostensibly intended... Continue reading
Posted Mar 8, 2021 at Credit Slips
Today, Judge Failla of the Southern District of New York issued an opinion rejecting PDVSA's request for a declaration invalidating the PDVSA 2020 bonds. These bonds, which we've written about before (e.g., here, here and, here) are backed by a... Continue reading
Posted Oct 16, 2020 at Credit Slips
Mark Weidemaier and Mitu Gulati We’ve written before about the perplexing prescription clause that appears (in one form or another) in Venezuela’s bonds. A common version of the clause says something like this: Claims in respect of principal and interest... Continue reading
Posted Sep 29, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati To prepare for later discussions about how to address the looming debt crisis caused by Covid-19, our first few episodes of Clauses and Controversies look backwards, albeit to historical events with current salience. Episode Two... Continue reading
Posted Aug 23, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati Both of us are teaching 1L Contracts online this semester and fear we also may have to do the same for our joint Duke/UNC sovereign debt class next semester. One silver lining is that we... Continue reading
Posted Aug 21, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati Judicial outcomes are determined by a variety of factors beyond precedent, statutory text, and other purely legal inputs. One factor, especially in cases involving foreign governments, is the preference of the U.S. government. In the... Continue reading
Posted Jul 27, 2020 at Credit Slips
Mark Weidemaier and Mitu Gulati As negotiations between the Argentine government and its creditors have gotten increasingly acrimonious, some have begun talking about litigation. Because Argentina’s bonds have collective action clauses, it can impose restructuring terms on dissenting creditors as... Continue reading
Posted Jul 20, 2020 at Credit Slips
Mark Weidemaier and Mitu Gulati In 2016, the Maduro government bought some time through a debt exchange in which holders of maturing bonds issued by state oil company PDVSA swapped them for new bonds due in 2020. The new bonds... Continue reading
Posted Jul 12, 2020 at Credit Slips
Yesterday was the deadline for opening briefs regarding the writ of attachment and potential execution sale of PDVSA’s shares in PDVH, the parent company of US oil refiner CITGO. As expected, Venezuela has asked the court to set aside the... Continue reading
Posted Jun 18, 2020 at Credit Slips
By Mitu Gulati and Mark Weidemaier In 2014, after much fanfare, a shiny new set of collective action clauses was released by ICMA (the International Capital Markets Association), with the endorsement of the IMF, the US Treasury, and others. The... Continue reading
Posted Jun 9, 2020 at Credit Slips
Mitu Gulati and Mark Weidemaier We have been working on building a dataset of sovereign bonds and their contract terms. Given the economic fallout of the Covid-19 pandemic--close to 100 countries have approached the IMF for assistance--we would not have... Continue reading
Posted May 10, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati The sovereign debt world has been debating how to design an emergency debt standstill for the poorest nations, so that they can devote scarce resources to public health rather than debt service. As we’ve discussed... Continue reading
Posted Apr 30, 2020 at Credit Slips
Mitu and I posted some preliminary thoughts about the defense of necessity, which might be raised as a basis for allowing sovereign borrowers to defer debt service during the crisis. I wanted to follow up on some of the open... Continue reading
Posted Apr 23, 2020 at Credit Slips
Mark Weidemaier and Mitu Gulati COVID-19 has wrought an unprecedented economic crisis, which will most severely impact the poorest countries. Anna has written insightfully (here and here) about the G-20’s agreement to a temporary debt standstill for a subset of... Continue reading
Posted Apr 21, 2020 at Credit Slips
Mark Weidemaier and Mitu Gulati We posted earlier about Lebanon’s befuddling fiscal agency agreement. Understanding what exactly the modification provision in this contract means to say is key because Lebanon is in the process of trying to restructure its obligations... Continue reading
Posted Apr 15, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati Our prior post expressed frustration with the drafting of Lebanon’s fiscal agency agreement, and particularly the collective action clause. The CAC both lacks the aggregation features that are now standard in the market and potentially... Continue reading
Posted Mar 16, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati After trying but failing to locate the fiscal agency agreements underlying Lebanese bond issues, we finally managed to get our hands on this one. We had hoped that the FAA would clarify the respective legal... Continue reading
Posted Mar 12, 2020 at Credit Slips
A follow-up on my exchange with Mitu (parts 1, 2, 3, and 4) about whether a judgment-holder is bound by the terms of a restructuring accomplished via a sovereign bond’s collective action clause (CAC). The broader concern is that “rush-in”... Continue reading
Posted Feb 17, 2020 at Credit Slips
There is a subtext to my recent exchange with Mitu (here, here, and here) about whether a judgment-holder is bound by a subsequent vote to modify a bond’s payment terms, and it is of course Venezuela. U.S. sanctions prevent a... Continue reading
Posted Feb 13, 2020 at Credit Slips
Mitu’s post from two-days ago frames an important question. An investor holds a defaulted sovereign bond that includes a collective action clause, sues, and gets a final judgment for the full amount of the outstanding principal. Later, a majority of... Continue reading
Posted Feb 12, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati Ben Bartenstein at Bloomberg has a provocative article on “prescription” clauses in Venezuela’s post-2005 sovereign bonds. As he explains, these clauses arguably modify the statute of limitations that would otherwise apply to bondholder claims, creating... Continue reading
Posted Feb 1, 2020 at Credit Slips
Mark Weidemaier & Mitu Gulati Tim Harford of the Financial Times has a brilliant new podcast, Cautionary Tales (here). A recent episode, “Danger, Rocks Ahead!,” centers on the wreck of the Torrey Canyon, an enormous oil tanker manned by an... Continue reading
Posted Jan 5, 2020 at Credit Slips
John: yes, the lack of aggregation features.
Mark Weidemaier and Mitu Gulati For a while now, we have been meaning to write about “sovereign gold bonds,” or “SGBs,” which the Indian government has been marketing under domestic law to residents of the country since November 2015. Gold... Continue reading
Posted Dec 6, 2019 at Credit Slips
Mark Weidemaier & Mitu Gulati Debt, like the full moon, is known to make politicians act strangely. There have been some good examples over the last few weeks, most recently in Lebanon and Italy. Let’s begin with Lebanon. The country... Continue reading
Posted Dec 3, 2019 at Credit Slips