FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange in Manhattan, New York City, U.S. December 28, 2016. REUTERS/Andrew Kelly/File PhotoLONDON/NEW YORK : Investors in emerging market sovereign bonds, alarmed by efforts to limit their debt restructuring options, are adding clauses to bond deals that would allow them to switch jurisdictions to avoid such curbs.
"The ideas ...are not going to go away," Andrew Wilkinson, senior restructuring partner at law firm Weil Gotshal said regarding proposed bills."They will keep coming up, because there is a problem." "You will be imposing haircut when you have two different lenders with two complete different reasons for lending," said Rodrigo Olivares-Caminal, chair in banking and finance law at Queen Mary University of London.Creditors also warn that changes like those mooted in New York could backfire - making them avoid lending to poor countries or demand higher returns to justify the risk.
He said the clauses were a direct reaction to"fires" in the two main jurisdictions - New York state and England, where similar proposals have gained renewed traction since the Labour party took power.