The pari passu clause and the Argentine case

The case of NML Capital Ltd v Argentina decided by a US federal court of appeals in New York in October 2012 held that Argentina violated a standard pari passu clause in its old unrestructured bonds and therefore Argentina was ordered not to make any payments on new bonds unless it made a rateable payment to the holders of the old bonds. The new bonds had been exchanged for most of the old bonds in 2005 and 2010 pursuant to the restructuring of Argentina’s foreign debt.

The court held that the reasons for the violation were a combination, among other things, of a statute passed by Argentina preventing Argentina from paying the holders of the old bonds as hold-outs, declarations by Argentina that it would not pay the hold-outs and the persistent non-payment of the hold-outs for six years.

The pari passu clause typically provides that the bond debt will rank pari passu with other debt or, in the case of sovereigns, other external debt. It is a standard provision in international sovereign and private sector bonds…

Click on the link below to read the rest of the Allen & Overy briefing.  

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Analysis from The Lawyer

  • Panel reviews

    Panel reviews 2014: The chosen ones

    Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all

  • training

    Accutrainee: Revolution postponed

    At the time of its launch Accutrainee was described as a revolutionary change to the training model. Has it proved to be so? Not really.

View more analysis from The Lawyer

Overview

One Bishops Square
London
E1 6AD
UK
http://www.allenovery.com

Turnover (£m): 1,234.30
No. of lawyers: 2,194 (UK 200)
Jurisdiction: UK
No. of offices: 11
No. of qualified lawyers: 273 (International 50)