Collective Action Clauses: A first global test in Argentina Remarks by Ed Bartholomew at the
Sovereign Debt Restructurings Conference February 28, 2020
Global Independence Center LeBow College of Business at Drexel University
Evolving standards for collective action clause (CACs) Original CACs (2003) Series Two-limb
Enhanced CACs (2014) Series Two-limb Single-limb
by series
aggregated
by series
aggregated
aggregated
Source
Mexico
Uruguay
ICMA
ICMA
ICMA
Bond-level
75%
66-2/3%
75%
50%
Uniformly
threshold
vote
vote
vote
vote
applicable
66-2/3%
75%
vote
vote
Aggregated threshold
N/A
85% vote
N/A
“Kirchner bonds” (2005/10 restructuring)
“Macri bonds” (2016-18) © E. Bartholomew, 2020
1
Illustration
Voting – Series-by-series, Mexico-style CACs Maturity
Coupon
Amount (mm)
Vote Yes / No
% Yes
15 May 2020
6%
$200
99 / 101
49.5%
✗
--
12 Apr 2022
12%
$200
140 / 60
70.0%
✗
--
18 May 2025
7.5%
$600
451 / 149
75.2%
✓
$600
14 Mar 2030
9%
$1,000
800 / 200
80.0%
✓
$1,000
25 Jan 2040
6.5%
$1,000
900 / 100
90.0%
✓
$1,000
$3,000
2,390 / 610
79.7%
Total
© E. Bartholomew, 2020
Bond-level: 75% Aggregate: --
Amount restructured
$2,600 2
Illustration
Bond-level: 66 2/3% Aggregate: 85%
Voting – Two-limb, Uruguay-style CACs Maturity
Coupon
Amount (mm)
Vote Yes / No
% Yes
15 May 2020
6%
$200
99 / 101
49.5%
✗
--
12 Apr 2022
12%
$200
140 / 60
70.0%
✓
--
18 May 2025
7.5%
$600
451 / 149
75.2%
✓
--
14 Mar 2030
9%
$1,000
800 / 200
80.0%
✓
--
25 Jan 2040
6.5%
$1,000
900 / 100
90.0%
✓
--
$3,000
2,390 / 610
79.7%
✗
--
Total
© E. Bartholomew, 2020
Amount restructured
3
Illustration
Bond-level: 50% Aggregate: 66 2/3%
Voting – Two-limb, ICMA-standard CACs Maturity
Coupon
Amount (mm)
Vote Yes / No
% Yes
15 May 2020
6%
$200
99 / 101
49.5%
✗
--
12 Apr 2022
12%
$200
140 / 60
70.0%
✓
--
18 May 2025
7.5%
$600
451 / 149
75.2%
✓
--
14 Mar 2030
9%
$1,000
800 / 200
80.0%
✓
--
25 Jan 2040
6.5%
$1,000
900 / 100
90.0%
✓
--
$3,000
2,390 / 610
79.7%
✓
--
Total
© E. Bartholomew, 2020
Amount restructured
4
Illustration
Voting – Single-limb, ICMA-standard CACs Maturity
Coupon
Amount (mm)
Vote Yes / No
% Yes
Amount restructured
15 May 2020
6%
$200
99 / 101
49.5%
$200
12 Apr 2022
12%
$200
140 / 60
70.0%
$200
18 May 2025
7.5%
$600
451 / 149
75.2%
$600
14 Mar 2030
9%
$1,000
800 / 200
80.0%
$1,000
25 Jan 2040
6.5%
$1,000
900 / 100
90.0%
$1,000
$3,000
2,390 / 610
79.7%
Total
© E. Bartholomew, 2020
✓
Bond-level: -Aggregate: 75%
$3,000 5
Argentina foreign-law bonds
$64 billion principal outstanding, 21 series of bonds
<3 yrs ($11b) [5] Kirchner Bonds ($25 bn) [6 series]
Macri Bonds ($39 bn) [15 series]
6-9 yrs ($17b) [5] 16-28 yrs ($8b) [4] 97 yrs ($3b) [1] Source: Presenterâ&#x20AC;&#x2122;s calculations from press reports Š E. Bartholomew, 2020
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Thank you! Questions? Contact details LinkedIn: ed-bartholomew-bbp Email: bartholomew@gwu.edu
Š E. Bartholomew, 2020
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