The Republic of Argentina returned to global debt markets after a 15-year absence on April 19, 2016, when it sold $16 billion in bonds to fund a series of landmark settlements reached earlier this year with holdout bondholders from the South American nation’s 2005 and 2010 debt restructurings. This latest development in the more than decade-long battle between Argentina and the holdouts—led by hedge funds Aurelius Capital Master Ltd. (“Aurelius”) and NML Capital Ltd.

Bond restructurings Implementation mechanisms: schemes vs. exchange offers December 2015 ■ a principal haircut; ■ extended maturity; and / or ■ a change in coupon (rate and/or whether the coupon is cash-pay or PIK). Exchange offers are based entirely on voluntary participation. They can only succeed if a critical mass of bondholders agrees to participate. A “carrot and stick” approach is used to incentivise participation and penalise holdouts. For background on the use of schemes of arrangement as restructuring tools, see here.

Although the Weil Bankruptcy Blog generally focuses on developments in the chapter 11 context, from time to time we cover cases outside of the bankruptcy world that may interest our readers.  Among the challenges restructuring professionals frequently face are analyzing bond indentures, identifying parties’ respective rights to determine whether potential transactions are permissible, and invoking their clients’ rights to payment and other protections.  As we have seen in the recent decisions in