Trustees Versus Fiscal Agents for Sovereign Bonds

6 Pages Posted: 12 Jan 2018

See all articles by Lee C. Buchheit

Lee C. Buchheit

Center for Contract and Economic Organization

Date Written: October 17, 2017


Issuing sovereign bonds in the international markets using a trust structure rather than a fiscal agency agreement conveys several benefits for the issuer and the holders of the bonds. Principal and interest payments received by a trustee will be less susceptible to attachment by third party creditors of the issuer (a benefit for both the issuer and the bondholders). The trustee, as the representative of the bondholders, can act as the natural interlocutor should circumstances arise requiring a modification to the instruments. Finally, the trustee will be principally (the U.S. practice) or wholly (the English practice) responsible for enforcing the bonds following a default and, if so instructed, will do so ratably on behalf of all holders. This feature tends to dampen the interest of congenitally litigious creditors in bonds issued under trust structures.

Keywords: Sovereign Bonds, Trustees, Fiscal Agents

JEL Classification: H63, H74, H81, K12, K22

Suggested Citation

Buchheit, Lee C., Trustees Versus Fiscal Agents for Sovereign Bonds (October 17, 2017). Available at SSRN: or

Lee C. Buchheit (Contact Author)

Center for Contract and Economic Organization ( email )

New York, NY

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