NML Capital, Ltd. v. Republic of Argentina and the Changing Roles of the Pari Passu and Collective Action Clauses in Sovereign Debt Agreements

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The recent defaults or threatened defaults of numerous sovereign states such as the Hellenic Republic, Belize, and Cyprus have made sovereign debt restructuring, once again, an important issue for international financial markets. This Note provides a summary of the development of the pari passu clause from its beginnings as a form of legal subordination to more senior obligations to the “ratable payment” interpretation.