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Debt for equity deals often occur when large companies run into serious financial trouble, and often result in these companies being taken over by their principal creditors. This is because both the debt and the remaining assets in these companies are so large that there is no advantage for the creditors to drive the company into bankruptcy.
Bondholders who withhold their consent and retain their right to seek the full repayment of original bonds, may disrupt the restructuring process, creating a situation known as the holdout problem. The contractual terms for obligating all bondholders to accept a restructuring approved by some supermajority is typically spelled out in what are ...
[citation needed] In 1996, Paris and Moscow signed an accord for Russia to repay a nominal value of between $80 and $100 for each of the 4 million czarist bonds believed to remain in circulation in France, for a total payout of around $400 million. [7] Russia paid but not nearly as generously as the descendants of French bond buyers hoped. [8]
Russia is due to pay $117 million in interest on two dollar-denominated sovereign bonds on Wednesday - the first such payments since its invasion of Ukraine which sparked a raft of sanctions from ...
Such willful defaults (the equivalent of strategic bankruptcy by a company or strategic default by a mortgager, except without the possibility of the exercise of normal creditors' rights such as asset seizure and sale) can be considered a variety of sovereign theft; this is similar to expropriation (including inadequate repayment for the ...
Russia's finance ministry said on Monday it had sent an order to a correspondent bank for the payment of coupons on eurobonds amounting to $117.2 million which are due on Wednesday. The diplomatic ...
Such debts cannot be repaid in a stable price environment, much less a deflationary environment, and instead must either be defaulted on, forgiven, or restructured. Widespread debt relief either requires government action or individual negotiations between every debtor and creditor, and is thus politically contentious or requires much labor.
If a government does not meet an obligation, it is in "default". As governments are sovereign entities, creditors who hold debt of the government cannot easily seize the assets of the government to re-pay the debt (though "Vulture funds" often find ways to do so). The recourse for the creditor is to request to be repaid at least some of what is ...