Professor Rodrigo Olivares-Caminal
Rodrigo Olivares-Caminal is a Professor in Banking and Finance Law at the Centre for Commercial Law Studies (CCLS) at Queen Mary University of London. Prior to joining CCLS he was a Senior Lecturer in Financial Law and the Academic Director at the Centre for Financial and Management Studies (SOAS), University of London and the School of Law, University of Warwick. He taught in undergraduate and postgraduate courses in various Schools of Law and Business Schools in the United Kingdom, Spain, Greece, France and Argentina as well as in professional training courses in Africa, Asia and Europe.
Rodrigo has acted as a Sovereign Debt Expert for the United Nations Conference on Trade and Development (UNCTAD), Senior Insolvency Expert for the World Bank / IFC and as a consultant to several multilateral institutions in Washington DC and Europe, Central Banks and Sovereign States as well as in several international transactions with Law Firms. He specialises in international finance and insolvency law. He is the author/editor of seven books and has extensively published in peer-reviewed journals. He sits in the editorial/advisory board of several law journals in the UK and US and is a member of national and international institutions and associations specialised in comparative commercial and insolvency law.
Practice Area
Panel
- Consulting Editorial Board
4 Contributions by Rodrigo Olivares-Caminal
PRACTICE NOTES
Collective Action Clauses in Sovereign Bonds: Structures, Voting Thresholds, EU/ESM Mandate, ICMA Single-Limb Aggregation, and Practice from Greece
Mounting piles of debt and their steady rise have caused repayment difficulties and, in certain cases, default. Thus, when countries build up unsustainable debt loads (ie when the ratio of debt to gross domestic product (GDP) climbs so far that policy measures cannot reverse it), the need to restructure existing liabilities increases. With many banks and retail bondholders now involved, private creditors have become more numerous, largely anonymous and harder to co‑ordinate (see Practice Note: Identifying bondholders and effective communication).
Types of collective action clauses (CACs)
These are provisions sometimes included in a bond issuance’s indenture and prospectus, requiring bondholders to act together to facilitate the restructuring of such instruments by overcoming co‑ordination problems (also see Practice Note: Intercreditor payment priorities and requisite majorities). There are four different types of CACs. These are:
collective representation clauses (clauses intended to co‑ordinate representation of the bondholders as a group)
majority action clauses (clauses that provide for an action to be taken or adopted by a majority decision)
sharing clauses (clauses which provide that any proceeds obtained from the debtor would...
Restructuring & Insolvency
PRACTICE NOTES
Sovereign Debt Litigation: Choice of Forum, Governing Law, State Immunity, Enforcement Challenges and Restructuring
Accumulated debt, coupled with economic upheaval or a climatic or other external jolt to a nation, can precipitate a crisis severe enough to push creditors to explore legal avenues for recovery. In the language of finance, such disruption will typically amount to an event of default.
Where to sue?
Following an event of default on, for instance, bond obligations, sovereigns commonly formalise the existence of a public emergency by passing legislation or issuing an executive order or decree. By way of illustration, amid Greece's crisis, Parliament adopted the Bondholders Act 4050/12. In those circumstances, domestic courts would refrain from striking down the default and the extraordinary steps taken by the sovereign's government in light of the national emergency confronting the country. Even where the debtor has waived sovereign immunity, that waiver is often circumscribed within its own borders.
Accordingly, creditors are left with virtually a single practical route: to pursue their claims in a jurisdiction other than that of the debtor. Failing that, they must contend with the unpredictability of litigating in a hostile and uncertain forum, in which the legislative apparatus is capable of altering the rules within that forum, where rules may shift...
Restructuring & Insolvency
PRACTICE NOTES
Sovereign debt restructuring: financing sources, creditor co‑ordination challenges, holdouts, CACs and exit consents, with recent developments (UN principles, G20 DSSI/Common Framework) and lessons from Greece
Sources of financing
Sovereign borrowers, whether emerging or advanced, raise funds via multilateral, bilateral, or private channels. The first two typically take the form of loan agreements. Private funding most often relies on bond placements and is the predominant avenue; at times it may involve commercial loan contracts, but because creditor groups are small these are negotiated discreetly and largely pass unnoticed. As bond issuance has surged, and virulent financial crises have become more frequent, bond restructurings have taken on greater prominence, particularly for sovereign issuers.
Difficulties with sovereign debt restructuring
Reliance on bonds to cover sovereign deficits has broadened and deepened capital markets. Yet major drawbacks emerge when obligations turn unsustainable. These include:
a growing, anonymous creditor base that is hard to co-ordinate
multiple instruments and issuance across diverse legal venues, with no unified statutory regime, which strengthens creditors’ capacity to hold out or litigate for improved terms
Moreover, past sovereign debt crises or episodes have displayed greater aggressiveness from...
Restructuring & Insolvency
PRACTICE NOTES
Transactional and market-based techniques for sovereign debt restructuring: CACs, exit consents, creditor co-ordination, innovative clauses and swaps, SDRM and the Common Framework
Sovereign debt restructuring techniques
The build-up of public liabilities and their steady rise have triggered repayment difficulties and, in some instances, default. Consequently, as states accumulate untenable debt loads (i.e. when the debt-to-gross domestic product ratio climbs so high that policy measures cannot reverse it), the imperative to reorganise their sovereign obligations intensifies. In broad terms, sovereign debt restructuring refers to the set of methods employed by sovereigns to avert or address financial and economic turmoil and to restore debt to sustainable levels. The bulk of sovereign borrowing is evidenced through bond issues (domestic or international) and, on occasion, commercial loans. Multilateral liabilities are not subject to restructuring (at most, rolled-over), while bilateral exposures are typically rescheduled or reworked under the auspices of the Common Framework or the Paris Club. Sovereign debt workouts comprise two dimensions: procedural and substantive. The procedural limb concerns how the reorganisation is undertaken (e.g. by invoking collective action clauses (CACs) or via an exchange offer, sometimes supported by other techniques), whereas the substantive limb concerns the modification of the obligations themselves, commonly involving rephasing of obligations and timelines, with scope defined by context and negotiated solutions within recognised forums and established contractual mechanisms accordingly therein...
Restructuring & Insolvency
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