Second Progress Report On Inclusion of Enhanced Contractual Provisions in International Sovereign Bond Contracts
Source details
- Canonical URL
- Second Progress Report On Inclusion of Enhanced Contractual Provisions in International Sovereign Bond Contracts
Other formats
Bibliographic details
- Published: December 27, 2016
Background: Executive Board endorsement and mandate
- The IMF Executive Board endorsed in October 2014 the inclusion of key features of enhanced pari passu provisions and collective action clauses (CACs) in new international sovereign bonds.
- The Executive Board endorsed the use of:
- (i) a modified pari passu provision that explicitly excludes the obligation to effect ratable payments, and
- (ii) an enhanced CAC with a menu of voting procedures, including a “single-limb” aggregated voting procedure that enables bonds to be restructured on the basis of a single vote across all affected instruments, a two-limb aggregated voting procedure, and a series-by-series voting procedure.
- Directors supported an active role for the IMF in promoting the inclusion of these clauses in international sovereign bonds.
- The IMFC and the G20 further called on the IMF to promote the use of such clauses and report on their inclusion.
Uptake of enhanced clauses (Section II)
- The IMF published a progress report in September 2015 on inclusion of the enhanced clauses as of end-July 2015.
- As of July 31, 2015:
- 41 issuances, representing 60 percent of the nominal principal amount of total issuances, had included the enhanced clauses.
- This paper (Second Progress Report) provides a further update as of October 31, 2016 and reports that uptake of the clauses has continued, with only a small minority of new issuances not including them.
Outstanding stock of international sovereign bonds (Section III)
- The October 31, 2016 update reveals:
- An increasing percentage of the outstanding stock includes enhanced clauses, but a significant percentage of the stock still does not.
Use of different bond structures (Section IV)
- Section IV reports on the use of different bond structures (summary statement in the report).
Staff outreach efforts (Section V)
- Section V describes the staff’s ongoing outreach efforts to promote inclusion of the enhanced clauses.
Other recent developments (Section VI)
- Section VI briefly reports on other recent developments relevant to the contractual approach to sovereign debt restructuring.
Conclusion and next steps (Section VII)
- Section VII concludes with next steps (summary statement in the report).
Key metadata and subjects
- Publication date: December 27, 2016
- Subject: Bond issues, Bonds, Collective action clauses, Debt restructuring, Sovereign debt
Second Progress Report On Inclusion of Enhanced Contractual Provisions in International Sovereign Bond Contracts (IMF), as of October 31, 2016.
Content in this bundle
- Policy Paper