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spreads. 135 These clauses do not for instance prevent holdout litigation by individual creditors before the restructuring is completed and becomes effective. The creditors have possibility to launch attacks on sovereign before the restructuring is closed down. This is especially the case when the sovereign decides to use a trustee instead of a ﬁscal agent, as is apparently the tradition for bonds issued under the laws of New York. Under these laws, it is apparently common that the trust indenture reserves to each individual bondholder the right to sue for its share of payment not made on a regularly-scheduled due date. 136 Some sovereign bonds recently issued have, however, broken up with this tradition. New York law bonds issued by Granada and Belize have granted the trustee all enforcement powers, as has always been the practice under English law bonds. 137 Further, collective action clauses can replicate corporate restructuring only to a certain extent. One major remaining difﬁculty is that a sovereign may have many different bonds issued, with different terms and clauses. It is difﬁcult, albeit not impossible, to consolidate collective action clauses across several issues. Finally, even though collective action clauses have become very popular among sovereign issuers, there remain a great number of past issues which lack such clauses. 138 According to Häseler, bonds issued in the German market under German law, fail to incorporate CAC’s. 139 CAC’s are indeed prevalent in bonds governed by the laws of NY and England. Many sovereigns keep issuing bonds subject to local law, without the beneﬁt of collective action clauses. 140
PERASSI, “Collective Action Clauses in Sovereign Foreign Bonds: Towards a More Harmonized Approach”, Euredia, 2003, at pp. 239-264 (who argue that the incorporation in foreign debt instruments of collective action clauses is “a useful and necessary contribution to the smooth resolution of sovereign debt crises” - at p. 241). 135. Bradley & Co (M. H. BRADLEY, J. D. COX and M. GULATI, “The Market Reaction to Legal Shocks and their Antidotes: Lessons from the Sovereign Debt Market”, Journal of Legal Studies, 2010, vol. 39, 289-324) have shown that CACs had no impact on the pricing of sovereign debt. See also BARRY EICHENGREEN and ASOKA MODY, “Do Collective Action Clauses Raise Borrowing Costs?”, Economic Journal, 2004, vol. 114, 247-264. 136. M. Buchheit has explained that this feature was inspired by US practice in respect of corporate bonds, but that it was carried over “as a matter of drafting inertia” to sovereign bonds (L. BUCHHEIT, “Supermajority control wins out”, Intl. Fin. L. Rev., 2007, 26/5, 21). 137. L. BUCHHEIT, “Supermajority control wins out”, Intl. Fin. L. Rev., 2007, 26/5, 21. 138. It has been suggested that in case a sovereign has issued some ’old’ debt, without the beneﬁt of CAC’s, the sovereign debtor could adopt a law which replicates the effects of CAC’s for all bond issues, but on the basis of a national law (L. C. BUCHHEIT & M. GULATI, “Restructuring a nation’s debt”, Int’l. Fin. L. Rev., 2010, 29/5, (46-49), 48-49 – who discuss the impact such law could have and whether it would be accepted by major international ﬁnancial institutions). 139. S. HÄSELER, “Individual Enforcement Rights in International Sovereign Bonds”, p. 3 – who reports that the adoption of CAC’s has been met by resistance due to obstacles under German law in particular regarding the possibility to amend bond provisions with a qualiﬁed majority. 140. This is apparently the case of Greece. According to Buchheit, “More than 90% of Greek bonds are governed by local law” (L. C. BUCHHEIT & M. GULATI, “Restructuring a nation’s debt”, Int’l. Fin. L. Rev., 2010, 29/5, (46-49), 46).

Droit des affaires - Insolvabilité des États et dettes souveraines -1

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