Political scientists Alexandra Zeitz and Lauren Ferry discuss how China's emergence as a major lender has impacted debt restructuring processes. They delve into topics such as Chinese lending in Africa, government relationships with private creditors, confusion surrounding debt contracts, negotiating IMF programs with borrowing countries, limitations and changes in sovereign debt architecture, unanswered questions on local currency debt, and coordination challenges in recent restructuring episodes.

Priscila Azevedo Rocha and Todd Gillespie discuss the investigation of sustainability-linked bonds, their effectiveness in combating climate change, risk allocation, alternative models, data adequacy, and the role of labels in investment decisions. They also explore retail markets, global youth activism, financial engineering, and the slow progress of the market.

Kenza Bryan, sustainability-linked bonds expert, discusses the unambitious nature of sustainability-linked bonds, GOP backlash against ESG lending, fake carbon credits, and lack of global consensus on debt relief for environmental objectives. She emphasizes the need to engage with new ideas and reform existing systems for climate improvement.

Exploring sustainability linked bonds and their potential to drive climate change action. Discussion on the purpose and perception of SLBs, the intricacies of bond issuance, and legal loopholes in bond documents. Delving into the rarity of bond call options and make-hole provisions. Exploring the challenges of proving beneficial ownership in legal cases.

Venezuelan Debt: The CITGO Auction, Statute of Limitations, and Other Enforcement Matters It’s a busy time for Venezuela’s creditors. The auction process is starting for the sale of Venezuela’s ownership interest in US-based refiner CITGO. The six year statute of limitations on bond claims is coming up, and both the Maduro government and the National Assembly are trying to head off a new wave of lawsuits by giving assurances that, if bondholders hold fire, the country won’t later raise the statute of limitations as a defense. Meanwhile, although a comprehensive debt restructuring would seem to be in everyone’s best interests, the ongoing US sanctions regime continues to make that impossible. Steven Bodzin of REDD Intelligence is one of the most incisive and knowledgeable observers of what’s going on in Venezuela. He joins us to help figure out the current state of play. Producer: Leanna Doty

Chasing Payment on Old Cuban Debt We have a great fondness on this podcast for unpaid historical debts and the attempts to litigate these. One such story is that of Cuban debts. Our guest is Rebecca Burton of Linklaters (London), who joins us to talk about the saga of CRF v. Banco Nacional de Cuba and the 2023 ruling out of the High Court in London. Among the key questions here was whether in fact CRF, a hedge fund that had consolidated a bunch of old Cuban debts, had in fact validly received authorization to be able to litigate against the Cuban state. Producer: Leanna Doty

Unpacking the Argentine GDP Warrants Case In 2005 and 2010, Argentina issued GDP-linked warrants as a sweetener to investors participating in its debt restructurings. At the time, the warrants didn’t seem so sweet. Holders assigned them little value, and most got rid of the warrants for pennies on the dollar. But in April, in a lawsuit brought by hedge funds that had bought the warrants on the cheap, an English judge ruled that Argentina had dramatically underpaid on the warrants, adding nearly 1.5 billion to the amount the country owes to foreign creditors. Our guests this episode are Tim Dodsworth, Maggie Hemsworth, and Severine Saintier, hosts of the fabulous Unpacking Contract Law podcast, who help us understand the intricacies of the case. Producer: Leanna Doty

Is a Diaspora Bond a Loan or a Gift? Contract law distinguishes contracts from promises to make a gift. Contracts are enforceable; gift promises are not. Theories supporting this distinction note that gift promises often are made in relational and non-market settings where reputational and other enforcement mechanisms work well, and where legal enforcement is less needed and might even be disruptive. Yet a literature in economic sociology shows a much blurrier boundary between gift and market transactions. One context in which this is so involves diaspora bonds issued by sovereign states. Dan Lainer-Vos (USC) joins us to talk about the contrasting experience of issuing diaspora bonds in Ireland and Israel, the subject of his terrific book, “Sinews of the Nation." Producer: Leanna Doty

Hamilton Bank Redux We have talked before about the lawsuit by Hamilton Bank against Sri Lanka, noting that Hamilton Bank is trying to avoid the effect of a restructuring. Once it gets a judgment, it will have a claim to be paid in full despite any subsequent modification of the bond. Sri Lanka seems to know this and has been raising plausible but weak legal arguments in an apparent attempt to delay the case. Now the government has outright asked the court to stay the lawsuit (though without explicitly saying what it is concerned about). We are skeptical the judge will grant an outright stay, but perhaps there is room for a little foot dragging...? Producer: Leanna Doty

The New Not Normal Felix Salmon, the OG of sovereign debt journalism joins us for our final episode of the season. We talk to Felix about his forthcoming book, The Phoenix Economy: Work, Life, and Money in the New Not Normal. The past three years of pandemic life have changed things around the world. Felix asks what this new “not normal” is and how it might impact what is coming next. Our particular focus, of course, is on what Felix thinks is in store for us on the sovereign debt front. And there is a lot to talk about: inflation fears, rising interest rates and China, China, China. Producer: Leanna Doty