Sovereign Bonds Changed by ICMA to Head Off Repeat of Argentina
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Sovereign bond contracts are being changed by the International Capital Market Association to prevent a repeat of the wrangling that has marred the restructuring of Argentina’s debt.
The new terms, known as collective action clauses, allow a majority of bondholders to agree changes to bonds that are binding on all investors, ICMA said in a statement. In future, a minority of investors won’t be allowed to undermine a restructuring agreed by 75 percent or more of bondholders.