Clauses & Controversies

Mitu Gulati & Mark Weidemaier

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

  1. Ep 169 - Can We Say Anything Meaningful About a Venezuelan Debt Restructuring?

    2 FEB

    Ep 169 - Can We Say Anything Meaningful About a Venezuelan Debt Restructuring?

    Can We Say Anything Meaningful About a Venezuelan Debt Restructuring? Venezuela must restructure its debt if it, and its new "friends" in Washington DC, want the economy humming again. But how? The debt stock is enormous and the range of claims so vast that normal techniques are unlikely to work. And typically, before anything could happen, the IMF would need to go in and assess the actual situation on the ground. All this takes time. But we imagine that the folks in Washington DC want to declare their adventure a success, and soon. Is that impulse consistent with an orderly, comprehensive debt restructuring? For that matter, what would a restructuring look like if we also assume that Washington wants to line its own pockets with Venezuelan oil revenues, and perhaps to give preferential treatment to oil major creditors (to entice them back into Venezuela)? We don’t have answers — but we suspect that those folks in DC don’t either. Producer: Leanna Doty

    43 min
  2. Ep 168 - Are CACs Unilateral Modification Clauses?

    12 JAN

    Ep 168 - Are CACs Unilateral Modification Clauses?

    Are CACs Unilateral Modification Clauses? We have always understood the collective action clause (CAC) in a sovereign bond to allow the bond issuer to propose a modification to the bond, which will bind everyone if approved by the requisite proportion of holders. Typically the sovereign is proposing to restructure its debt. This is more or less what bonds governed by NY law say, but bonds governed by English law appear to allow bondholders to gang together to modify the bond without the issuer's consent. Can that be right? We don't really think so, but we don't see anything in the text of the standard CAC in English law bonds that requires issuer consent. Imagine a Euro area issuer is nearing crisis and holders of its local law debt decide to switch their bonds to, say, English law. Can they do this unilaterally? Maybe so. Producer: Leanna Doty

    41 min
  3. Ep 167 - Will the Flip Clause Enter the Canon?

    5 JAN

    Ep 167 - Will the Flip Clause Enter the Canon?

    Will the Flip Clause Enter the Canon? Contract innovation is rare in sovereign debt markets, so we are interested whenever someone adds a new clause to the existing set of canonical forms. A number of innovations have appeared in 2025, one of which is the "flip clause." The clause allows investors to opt out of the governing law and enforcement jurisdiction initially chosen in the debt instrument. We have some questions about the clause and doubt that in its current form it will gain widespread acceptance. Right now, it seems more symbol than substance — a way to metaphorically flip off the New York legislature. Producer: Leanna Doty

    34 min
  4. Ep 166 - Imperial (Defaulted) Chinese Bonds (Again)

    01/12/2025

    Ep 166 - Imperial (Defaulted) Chinese Bonds (Again)

    Imperial (Defaulted) Chinese Bonds (Again) Yes, one of us might have sworn up and down that we would never do another episode about defaulted Imperial Chinese bonds. But a brand new case out of the DC federal courts has changed our minds. The case got the back of the hand from the district judge, but the arguments being made were not as weak as a quick glance at the opinion might suggest. Dare we hope for the entertainment value provided by an amicus brief filed by the Trump administration in support of the plaintiffs? Producer: Leanna Doty

    32 min
  5. Ep 165 - Total Return Swaps

    24/11/2025

    Ep 165 - Total Return Swaps

    Total Return Swaps There have been reports in the financial press about the use of Total Return Swaps to provide credit to governments (e.g., Angola), often in situations where the government can't otherwise borrow on capital markets. As best we understand them (i.e., badly) these are derivatives backed by sovereign bonds and sometimes cash as collateral. The collateral reduces borrowing costs and the debt stays off books, since the obligation to pay the bonds is contingent (since the bonds are only collateral). We increasingly hear scuttlebutt suggesting these deals are commonplace, and some of our investor friends complain that TRSs effectively subordinate existing creditors. We don't understand TRSs well, and we have questions. Isn't this just garden variety debt dilution? Does it violate the negative pledge clause? Producer: Leanna Doty

    30 min
  6. Ep 164 - Cambodia’s “Dirty Debts” to the US — Redux

    10/11/2025

    Ep 164 - Cambodia’s “Dirty Debts” to the US — Redux

    Cambodia’s “Dirty Debts” to the US — Redux In the 1970s, the US allowed Cambodia to finance the importation of rice and other agricultural commodities. The debt remains unpaid. One version of this story is that successor Cambodian governments have refused to pay these “dirty” debts. In this telling, the US used the loans to prop up a friendly but illegitimate Cambodian regime. Although the US shipped food, loan proceeds mostly financed the Cambodian military, which the US used as a proxy in the fight against the North Vietnamese and Khmer Rouge. Meanwhile, the US was bombing the Cambodian countryside, destroying domestic food production and contributing to a humanitarian crisis. To make matters worse, it turns out most of the food was sent to countries other than Cambodia. To some observers, the US bears a significant share of responsibility for the Khmer Rouge’s ultimate rise to power. Decades later, after indescribable suffering (caused at least in part by US interference) the US wants money back. The contours of this story are largely true, but the real story of the PL-480 “Food for Peace” program is more complicated. Today’s episode is about what we have found so far and the questions that still remain open. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5561161 Producer: Leanna Doty

    45 min
  7. Ep 163 - What if POTUS wanted an OBBD?

    20/10/2025

    Ep 163 - What if POTUS wanted an OBBD?

    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

    36 min
  8. Ep 162 - The Invasion Tax

    06/10/2025

    Ep 162 - The Invasion Tax

    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

    45 min
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About

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

Information

  • Creator
    Mitu Gulati & Mark Weidemaier
  • Years Active
    2020 - 2026
  • Episodes
    169
  • Rating
    Clean
  • Copyright
    © All rights reserved
  • Show Website
    Clauses & Controversies

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