Banks and Investors Call for New Debt Rules In Wake of Argentina Hedge Fund Case

The International Capital Market Association (ICMA), a group of banks and investors, will call Friday for reforms aimed at preventing repeats of the Argentina/NML Capital debt dispute. The ICMA’s plan would reduce the ability of hold-out creditors to litigate and undermine debt restructurings, in part by using contract clauses to bind all bond-holders to debt restructurings that 75% of all holders agree on.Additionally, the plan will argue that the “pari passu” or parity clauses in existing bond contracts should always mean that hold-out funds should always receive the same restructured bonds that the majority of investors agree on.

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