What Might a Syrian Debt Restructuring (Eventually) Look Like?

There is little doubt that Syria needs to restructure its debt, among other reasons to pave the way for rebuilding after a long and brutal civil war. It strikes us as too early to envision what that process will look like, but we can identify some of the key issues. The country owes a lot to official creditors, especially Iran and Russia. Much of this was off-books and was used for the military or otherwise to support former President Bashar al-Assad's repressive regime. Not surprisingly, we are already hearing the term "odious debt" raised to suggest these debts need not be repaid; there may be a separate doctrine allowing repudiation of certain war-related debts. We talk about whether these (arguable) doctrines of international law have any relevance here and about the potential role of the U.S. in a debt restructuring.

Producer: Leanna Doty

Ep 154 - What Might a Syrian Debt Restructuring (Eventually) Look Like?

What if Trump Discovers that Unpaid UK (and French) Debt From WWI?

The current administration has tossed concepts such as “special relationships” with allies out the window. The administration seems willing to apply just about any leverage it has to obtain concessions from allies, including concessions that might reduce the US debt. Seen in that light, what will happen when Trump and the Musketeers discover that the UK and France have hundred-year old unpaid debts? With interest, that unpaid debt would now amount to a few trillion dollars.  Enforcing these debts would be near impossible, except that the UK and France own a whole bunch of US Treasuries. Could the administration try to force a swap of those Treasuries into  longer term obligations? Or try to use the US government's claims against the UK and France as a setoff, reducing payments on US debt held by those governments? Seems loony. But loony is normal these days.

Producer: Leanna Doty

Ep 155 - What if Trump Discovers that Unpaid UK (and French) Debt From WWI?

Is There Any Law of State Succession? Syria, Ukraine and Greenland

The law of state succession to obligations comes mostly from a different era, when war and conquest were legal and borders changed with some frequency. Today, we are faced with multiple situations where borders might change due to war. Does the law tell us what happens to the debts attributable to the acquired territory? And how do we translate legal rules that evolved in the 18th and 19th centuries into the modern era? Paul Stephan (Virginia), one of the foremost international law experts, joins us to discuss.

Producer: Leanna Doty

Ep 156 - Is There Any Law of State Succession? (ft. Paul Stephan)

Sovereign Debt Odd & Ends
 
An odds and ends podcast about unrelated sovereign debt topics. First up, Venezuela. Most investors have been sitting around waiting for an eventual restructuring and lifting of US sanctions. But a handful of funds sued early, got judgments, and have spent years trying unsuccessfully to collect. If they had succeeded, they would have recovered much more than similarly-situated creditors who waited around for a restructuring deal. But they failed and, in a bizarre twist, have asked the court to vacate their judgments, effectively returning them to the creditor queue. We cry foul. Next up, another fiscally-irresponsible and increasingly author ... well, it's the United States. We discuss the crazy (and terrifying) idea that the US might unilaterally extend the maturities of government debt. 

Producer: Leanna Doty

Ep 157 - Sovereign Debt Odd & Ends

Some Questions, Now That it's About 3 Years Since Russia’s Default
 
It has now been around 3 years since Russia’s invasion of Ukraine, which prompted EU and US sanctions and a default on Russia’s external bonds. The prescription clause in these bonds says that Russia’s obligations become void unless investors make claims within three years of the date payment is due. What does it mean to “make” a “claim”? Filing a lawsuit would do the trick. What about an email requesting payment? An automated message, which the depository sends out every payment date? Should bondholders have sought an agreement tolling the prescription period? Since they didn't, does Russia now have what amounts to an option to pay past due amounts? And what about interest on unpaid amounts? Does Russia owe interest on payments that were impossible to make due to sanctions? 

Producer: Leanna Doty

Ep 158 - Some Questions, Now That it's About 3 Years Since Russia’s Default

The Greek GDP Warrant Drama

Greece’s debt situation has improved remarkably, from default status in 2012 to investment grade in 2025. A few weeks ago though, Bloomberg reported on a brewing drama with the GDP warrants that were offered to investors in the brutal 2012 restructuring. Apparently, Greece has elected to exercise its right to call the warrants, and holders are yelling bloody murder at the low price at which Greece says it is entitled to buy. Every side has lawyered up and claims the other side is acting unreasonably. We speculate wildly on what might actually be going on and what is likely to happen.

Producer: Leanna Doty

Ep 159 - The Greek GDP Warrant Drama

Ukraine's Expansive "Fiscal Laws" Clause
 
International sovereign bonds, and particularly those issued under English law, often include a clause providing that payments are subject to the applicable "fiscal and other laws." Usually, the clause makes clear this refers to fiscal laws in the “place of payment” (e.g., Luxembourg). Separately, international bonds also provide that, if the issuer imposes any taxes on bond payments, it must "gross up" payments to foreign investors, so the tax does not reduce their payments. Together, the two clauses usually immunize foreign investors from taxes imposed by the issuer but leave room for taxes imposed by the place of payment. Ukraine's bonds are different. They seem to leave room for Ukraine to impose its own "fiscal" law on payments. Arguably, they leave investors subject even to local laws that aren't fiscal in nature. Might this be a source of leverage for the country in its negotiations with GDP warrant holders, who have so far refused to make concessions in restructuring talks?

Producer: Leanna Doty

Ep 160 - Ukraine's Expansive "Fiscal Laws" Clause

Argentina Again
 
The Trump administration says it will do “whatever it takes” to rescue the Argentine peso and bond yields, saving buddy Javier Milei from electoral disaster. We do not think the U.S. Treasury can simply dole out money to Milei. If the administration does not want to go to Congress for permission (it generally does not), and if the Mexican bailouts of 1982 and 1995 are indicators, the U.S. Treasury will ask the Argentines to provide collateral of some sort. (The Falklands, maybe?) If so, holders of Argentine sovereign bonds might wonder whether they are entitled to some collateral too. Sovereign bonds have negative pledge clauses, which generally prevent the borrower from creating new secured debt without securing bondholders on equivalent terms. So, we looked at some of the negative pledge clauses in Argentine bonds. They are weird, but don't seem very protective. These are beautiful clauses, folks, BEAUTIFUL. Looks like the U.S. gets collateral, bondholders don't. Total disaster for them!

Producer: Leanna Doty

Ep 161 - Argentina Again

The Invasion Tax

The lawsuit over Ukraine's $3 billion bond debt to Russia seems to be on hold (maybe forever) in the English courts. And maybe there is no way for the Russian government to force repayment. Still, the debt is a minor cloud hanging (along with many bigger ones) over Ukraine. It would be nice if there was a way to make it go away permanently. Might there be? We talk about a common provision in a sovereign bond's Taxation section — we aren't sure how common, but it certainly isn't unique to Ukraine — that lets the issuer tax investors who have a connection to it other than simply holding its bonds. As written, this provision would allow Ukraine to impose a 100% tax on bond payments to Russia. This may not be what the drafters had in mind, and it opens the door to some unsavory tax shenanigans, but an Invasion Tax doesn't seem too objectionable.

Also: "Whatever it takes" means "whatever it takes!" Except when it means something else.

Producer: Leanna Doty

Ep 162 - The Invasion Tax

What if POTUS wanted an OBBD?

Let us say, purely hypothetically, that there is a point at which some combination of the spending excesses of the One Big Beautiful Bill, the government shutdown, a rejection by the Supreme Court of tariff mania, and more, result in a shortfall of revenues for the current administration. And let us also say that POTUS goes to his brains trust to ask how best to do an OBBD/R (One Big Beautiful Default/Restructuring). What path might the brains trust take? And what about the option of taxing the treasury holdings of foreign governments, which the administration has already signaled its interest in?

Producer: Leanna Doty

Ep 163 - What if POTUS wanted an OBBD?

Clauses and Controversies: A Podcast about International Finance, Contract Clauses and the Controversies Surrounding These Clauses

Ep 155 - What if Trump Discovers that Unpaid UK (and French) Debt From WWI?

Clauses & Controversies

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