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Mark Weidemaier
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The Judgment Holder Problem in Sovereign Debt Workouts
Some time ago, Mitu and I had an exchange (here are parts 1, 2, 3, and 4) about judgments and collective action clauses (CACs). The question was this: Assume that a bondholder “rushes in” to court (in Steven Bodzin’s apt... Continue reading
Posted May 8, 2024 at Credit Slips
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Do Investors Really Prefer Putin’s Booby Trapped Bonds?
Posted Jul 9, 2022 at Credit Slips
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That Odd Sri Lankan Airline Guaranteed Bond
Mitu Gulati & Mark Weidemaier After months of waffling, Sri Lanka’s head-in-sand government has finally acknowledged that it cannot pay its debts. The cavalry (IMF) has been called in and we guess that hordes of potential restructuring advisers are flying... Continue reading
Posted Apr 16, 2022 at Credit Slips
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How to Destroy the Collective Action Clause
Mark Weidemaier & Mitu Gulati We almost hate to post this, because it is so simple, and so fundamental, that it seems almost surely wrong. But if it’s wrong, we can’t see why. Maybe a reader can explain? Here goes.... Continue reading
Posted Apr 15, 2022 at Credit Slips
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Odd Lots Podcast: The Narrowly-Avoided Russian Debt Default
Mitu and I have posted a few times (here, here, and here) about some of the odd features in Russia's bond contracts. Perhaps the weirdest (and most odious) is the Alternative Payment Currency Event clause, in which investors effectively insure... Continue reading
Posted Mar 22, 2022 at Credit Slips
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Should Investors Who Care About ESG Buy Russian Sovereign Bonds?
Mark Weidemaier and Mitu Gulati Umm... no? We can think of two models of ESG investing. (At Bloomberg, Matt Levine has a more sophisticated take; also here.) One is normative, simple, and apparently held by very few investors. It goes... Continue reading
Posted Mar 15, 2022 at Credit Slips
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The Alternative Payment Currency Event Clause in Russian Sovereign Bonds
Mark Weidemaier and Mitu Gulati A clause in recent Russian dollar and euro currency bonds – presumably written in anticipation of the possibility of sanctions from the US or the European Union -- allows payments to be made in a... Continue reading
Posted Mar 9, 2022 at Credit Slips
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Are Russian Sovereign Bonds Now Worthless?
That is the question Mitu and I discuss in the latest Clauses and Controversies episode. We were prompted by a Bloomberg story quoting Jay Newman (formerly of Elliott Associates), who expects Russia to default and points out that its international... Continue reading
Posted Mar 7, 2022 at Credit Slips
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Clauses and Controveries: From Commercial Bank Loans to Blue Bonds
Mark Weidemaier and Mitu Gulati After a short hiatus (we like to say we are between seasons), the Clauses and Controversies podcast has resumed. This week's episode, From Commercial Bank Loans to Blue Bonds, features Antonia Stolper from Shearman &... Continue reading
Posted Jan 11, 2022 at Credit Slips
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More on Belize: Marine Conservation is Nice; Deeper Haircuts Are Better
A couple of additional thoughts on Belize’s debt workout, especially the relatively novel aspect involving the pre-funding of a marine conservation trust. The deal has featured prominently in the financial press lately, with great coverage in the FT (here by... Continue reading
Posted Oct 11, 2021 at Credit Slips
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Might PBA Creditors Take a Lesson From the Black Widow?
Mark Weidemaier and Mitu Gulati We’ve had lots of interesting responses to our earlier post on debt restructuring shenanigans engaged in by the Province of Buenos Aires. Many on the creditor side are miffed. Two issues raised by these responses... Continue reading
Posted Sep 6, 2021 at Credit Slips
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Why Are Creditors OK With The Province of Buenos Aires’ Dodgy Use of Exit Amendments?
Mitu Gulati and Mark Weidemaier For the most part, the financial press has not scrutinized the details of the ongoing restructuring by the Province of Buenos Aires (PBA), which is nearing completion. The details are worth considering. Some aspects of... Continue reading
Posted Sep 6, 2021 at Credit Slips
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(Why) Are ESG Sovereign Bonds (Such) Scams?
Mark Weidemaier and Mitu Gulati Environmental, social, and governance (ESG) investing is all the rage, with heaps of money pouring into sovereign and corporate bonds intended to finance efforts to meet climate-related goals and other worthwhile objectives. We have been... Continue reading
Posted Jul 9, 2021 at Credit Slips
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The Haitian Independence Debt
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
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SDNY Upholds Pledge of Collateral for PDVSA 2020s
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
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The Sideshow about Venezuela's Prescription Clause
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
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Episode Two of Clauses and Controversies: Imperial Chinese Bonds
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
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Clauses and Controversies podcast
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
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The US Government Mumbles Something in Support of Venezuela
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
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Some Confusion About Argentina’s Power to Reverse an Acceleration
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
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PDVSA’s 2020 Bonds: When and Why Does Venezuelan Law Matter?
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
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Selling CITGO--Timing and Process
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
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The Argentine Re-Designation Drama: Notes From Two Frustrated Readers
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
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How Are So Many EM Sovereigns Issuing New Debt?
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
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Immunity, Necessity and the Enforcement of Italian Debt in the Era of Covid-19
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
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