International Capital Market Association December 2013 ICMA SOVEREIGN BOND CONSULTATION PAPER For members of ICMA

International Capital Market Association 
December 2013 
ICMA SOVEREIGN BOND CONSULTATION PAPER 
For members of ICMA 

INTRODUCTION
1. ICMA’s primary objective is to support the creation of orderly and well-functioning
international capital markets. In line with ICMA’s mission, this involves setting
standards of best market practice, through contract reform and practical improvements
to standard form market documentation.
2. The last time that ICMA consulted its members on matters related to sovereign bonds
was in November 2010, when ICMA published a Sovereign Bond Consultation Paper
with a view to enhancing the transparency, availability and clarity of the terms and
conditions of sovereign bond issues.
3. Since that time a sovereign debt crisis has affected a number of euro area countries
including Greece, which has restructured a large proportion of its debt through Private
Sector Involvement (PSI) and a subsequent public debt buy back initiative. This
occurred in the context of substantial amounts of official sector funding from the IMF
and from euro area member states and the acceptance of a stringent economic
adjustment programme by the country itself and required private creditors to absorb
significant losses.
4. Elsewhere, the case of NML Capital v Argentina being litigated through the United
States' Courts in New York has attracted a great deal of attention. The litigation has
focussed both sovereign debtors and investors on the pari passu provision so often
included in the terms and conditions of sovereign notes. Aside from a debate as to the
interpretation of the provision, many different forms of which are used

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