Drafting a Model Collective Action Clause for Eurozone Sovereign Bonds

Capital Markets Law Journal, Forthcoming

14 Pages Posted: 14 Apr 2011 Last revised: 25 Dec 2014

See all articles by Lee C. Buchheit

Lee C. Buchheit

Center for Contract and Economic Organization; Cleary Gottlieb Steen & Hamilton LLP - New York Office

G. Mitu Gulati

Duke University School of Law

Date Written: June 8, 2011

Abstract

In the wake of the Eurozone sovereign debt crisis, the European financial authorities announced last November that all Eurozone sovereign bonds issued after mid-2013 must contain an identical collective action clause (CAC) in order, if necessary, to facilitate a restructuring of those instruments.

CACs in sovereign bonds have been the subject of considerable attention over the last ten years. They were introduced into sovereign bonds governed by U.S. law only in early 2003. Yet a surprising number of versions of the clause can be found in modern sovereign bonds.

The history of the research and development of this contractual provision is, or at least ought to be, relevant to the drafting of the model European version of the clause.

Keywords: sovereign debt, collective action clause, CAC, international economic

Suggested Citation

Buchheit, Lee C. and Gulati, Gaurang Mitu, Drafting a Model Collective Action Clause for Eurozone Sovereign Bonds (June 8, 2011). Capital Markets Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1807007

Lee C. Buchheit

Center for Contract and Economic Organization ( email )

New York, NY

Cleary Gottlieb Steen & Hamilton LLP - New York Office ( email )

One Liberty Plaza
New York, NY 10006-1470
United States

Gaurang Mitu Gulati (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

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