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Mark Weidemaier
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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
Mark Weidemaier & Mitu Gulati Earlier this year, we wrote an article with Ugo Panizza and Grace Willingham about an unusual type of promise made by some sovereign nations, including Spain and Greece. The promise—sometimes enshrined in the constitution, other... Continue reading
Posted Nov 24, 2019 at Credit Slips
Mark Weidemaier & Mitu Gulati Over the past week, we’ve discussed various uncertainties over how to interpret the new “uniformly applicable” standard added to aggregated Collective Action Clauses starting in 2014 (here and here). Anna Gelpern’s recent post neatly clarifies... Continue reading
Posted Nov 6, 2019 at Credit Slips
Mark Weidemaier and Mitu Gulati We hope readers will forgive our trafficking in rumors, but this one is interesting and raises some fun and wonky questions about the relationship between Argentina’s different bonds. We talked about those differences in our... Continue reading
Posted Nov 4, 2019 at Credit Slips
Mark Weidemaier & Mitu Gulati Okay, everybody ready? Argentina? Check. Debt crisis? Check. Cristina Kirchner and crew back in office to, um, right the ship of state? Check. Last time round, their plan involved hurling insults at a U.S. federal... Continue reading
Posted Oct 29, 2019 at Credit Slips
Mark Weidemaier & Mitu Gulati Along with Ugo Panizza of the Graduate Institute in Geneva, we’ve put up a couple of posts in recent days asking whether Venezuela might have a legal basis for challenging its obligations on the PDVSA... Continue reading
Posted Oct 12, 2019 at Credit Slips
Mark Weidemaier & Mitu Gulati Writing with Ugo Panizza, we have a piece out today on Project Syndicate (Should Creditors Pay the Price for Dubious Bonds?) discussing the collateralized bond issued by Venezuelan state oil company PDVSA (the PDVSA 2020... Continue reading
Posted Oct 9, 2019 at Credit Slips
Mark Weidemaier and Mitu Gulati We may be partly to blame for the fact that stories keep surfacing about whether the U.S. government might help holders of pre-revolutionary, defaulted Chinese debt monetize their claims. Here’s Tracy Alloway of Bloomberg, with... Continue reading
Posted Sep 10, 2019 at Credit Slips
Today, the U.S. Court of Appeals for the Third Circuit affirmed the order allowing jilted Canadian mining company Crystallex to attach PDVSA's equity stake in PDV-Holding (the corporate parent of CITGO). Here's the unanimous opinion. (For prior coverage of the... Continue reading
Posted Jul 29, 2019 at Credit Slips
Mitu Gulati & Mark Weidemaier The two of us are beginning a project to build a dataset of foreign currency sovereign bonds and their contract terms. The dataset of bond issuances has a conspicuous absence: India. Turns out India has... Continue reading
Posted Jul 27, 2019 at Credit Slips
Tim Worstall: Yes, indeed they were--for French bondholders if memory serves. The PRC did the same for British bondholders in the 1980s. No question the US could broker a similar deal here. But to (legally) use the debt to set-off the US national debt...? Not so much.