To Formalize or Not to Formalize: Creditor-Debtor Engagement in Sovereign Debt Restructurings

25 Pages Posted: 6 Jul 2018

See all articles by Michael Waibel

Michael Waibel

University of Cambridge - Faculty of Law; Lauterpacht Centre for International Law; University of Cambridge - Jesus College

Date Written: July 1, 2018

Abstract

Creditor-debtor engagement in one form or another has been a feature of many sovereign debt restructurings. In some cases, debtor-creditor engagement has been formalized and took the specific form of creditor committees. Views differ considerably on the merits and demerits of CCs, and on the level of prescription and detail that is desirable from a policy perspective. The incentives of the main actors in sovereign debt also differ with respect to creditor engagement, particularly as regards ex ante contractual clauses. The article focuses on the possible content of creditor-debtor engagement. Creditor-debtor engagement can take four main forms: (i) the insertion ex ante of contractual clauses in bond documentation for creditor committees (CCs); (ii) ex ante best practices for formal creditor committees; (iii) ex ante best practices for engagement between creditors and debtors or (iv) ex post agreement between the debtor and creditor on creditor engagement or CCs.

Keywords: creditor, debtor, Creditor-debtor Engagement, sovereign debt, bonds, loans

Suggested Citation

Waibel, Michael, To Formalize or Not to Formalize: Creditor-Debtor Engagement in Sovereign Debt Restructurings (July 1, 2018). University of Cambridge Faculty of Law Research Paper No. 46/2018. Available at SSRN: https://ssrn.com/abstract=3209258 or http://dx.doi.org/10.2139/ssrn.3209258

Michael Waibel (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Lauterpacht Centre for International Law ( email )

5 Cranmer Road
Cambridge, CB3 9BL
United Kingdom

University of Cambridge - Jesus College ( email )

Jesus Lane
Cambridge, CB5 8BL
United Kingdom

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