This paper surveys the literature on sovereign debt from the perspective of understanding how sovereign debt differs from privately issue debt, and why sovereign debt is deemed safe in some countries but risky in others. The answers relate to the unique power of the sovereign. One the one hand,...

The Commonwealth of Puerto Rico has been the center of attention as it faces mounting pressure from its unsustainable debt obligations. Puerto Rico’s current fiscal predicament is further complicated by the fact that it lacks a contractual mechanism that would help it obtain debt relief, if it...

The rise of vulture fund investing in sovereign bonds has created additional hurdles to successful restructuring in an already fragile ad hoc process. Recent litigation in NML Capital, Ltd. v. Argentina has proven courts' willingness to utilize powers of equity to enforce a ratable payment...

On August 29, 2014, the International Capital Market Association (ICMA) published new recommended terms for sovereign bond contracts governed by English law. One of the new terms would allow a super majority of creditors to approve a debtor's restructuring proposal in one vote across multiple...

Sovereigns in distress often engage in debt restructuring, typically negotiating with multiple classes of bondholders at once. We investigate whether sovereign bondholders benefit from committing not to restructure their debt. To do so, we use a court ruling that made one class of bonds easier...