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TLDR; When restructuring defaulted bonds, Argentina agree to borrow in US dollars. They further agreed: - to pay all bond holders equally. - to be governed b
by yread 12y ago
TLDR;
When restructuring defaulted bonds, Argentina agree to borrow in US dollars. They further agreed:
- to pay all bond holders equally.
- to be governed by New York state law.
- to NOT include a collective action clause in the bond agreement which would have forced minority recalcitrant bondholders to enter a restructuring agreement, if a super majority of the bondholders agreed.
A small minority (2.5-3%) refused to accept the 70-75% haircut the Argentina government was forcing on the bondholders (fyi: previously the largest haircut in sovereign debt was 30%)
(from one of the dealbook article's comments)
- fonosip 12y agoSmall corrections: - Holdouts are 7.6% - Haircut was around 75% nominal, but in practice was more around 40% since there were some GDP growth incentives and better interest rates
- raphar 12y agoAdditionaly, the hedge funds weren't among the original creditors. They bought the defaulted bonds on the cheap, just to pursue legal battle. There are other creditors holding defaulted bonds, but these funds are the only ones that got a favorable ruling.