SOGEI website background

The pari passu clause is back on track in Argentina’s sovereign debt restructuring

The pari passu clause is back on track in Argentina’s sovereign debt restructuring

The ‘pari passu’ clause and its interpretation by the US courts are front and centre right now as Argentina is once again carrying out a sovereign debt restructuring. Previously, when the rulings of the US courts on how this clause and its equal treatment provision had to be applied were issued within the Argentina sovereign bonds litigation, the concern was that such rulings would have an impact on the viability of debt exchanges in the future. The core argument of the plaintiffs in NML Capital, Ltd. et al v. The Republic of Argentina was that the ‘pari passu’ clause provided under the defaulted sovereign bonds they held required Argentina to make payments to the plaintiffs in the event a payment was made under the exchange bonds issued by Argentina in 2005 and 2010 as a result of its debt restructuring. […]