Sovereign Debt Restructuring: Covenant and Default Clauses in Sovereign and Corporate Bonds and How the Difference Among Them Impacts in the NMLCase Against the Republic of Argentina in New York

Abstract

This paper discusses key clauses of the sovereign and corporate debt bonds, with emphasis in the latter ones. In particular, the paper analyses such clauses as covenants, events of default, rights to sue and modifications and how they are applied in a sovereign debt restructuring process. It then also discusses the current events faced by the Republic of Argentina under its debt situation and the relationship between those events with the judicial case against the republic being litigated in the courts of New York. It finally describes the different ways that Argentina may take upon the various possible outcomes from said judicial proceedings before the courts of New York.