Prof. Jayanth R. Varma's Financial Markets Blog

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Prof. Jayanth R. Varma's Financial Markets Blog, A Blog on Financial Markets and Their Regulation

© Prof. Jayanth R. Varma
jrvarma@iima.ac.in

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March
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2005
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Thu, 31 Mar 2005

More on who owns the bonds?

The issue of who owns the bonds is still not fully resolved. Bloomberg quotes the New York judge as saying ‘Both sides have raised serious issues, good faith issues’. The judge ruled that the creditor could not seize the defaulted bonds held by the the exchange agent for swap becuase these bonds still belong to the bondholders not to Argentina. But, he then went on to say that the creditor may be entitled to attach Argentina's right to receive the bonds, if not to attach the bonds themselves before the exchange takes place.

Posted at 16:23 on Thu, 31 Mar 2005     View/Post Comments (0)     permanent link


Tue, 29 Mar 2005

Do bonds belong to the lender or borrower?

A creditor of Argentina has got a New York court to attach bonds issued by Argentina. Normally one hears of assets being attached, but here it appears that a liability is being attached. This peculiar situation has arisen because Argentina is going through a debt restructuring. The bonds in question had defaulted and the bond holders had surrendered them for conversion into new bonds of reduced face value as part of this debt restructuring.

In this context, the surrendered bonds could conceivably be an asset. To compound the problem, the bonds are actually held by a custodian bank. The question will then be whether this custodian is an agent of the bond holder or of the issuer. If it is an agent of the issuer (Argentina) then the attachment may be tenable. Otherwise the bonds do not belong to Argentina and the attachment would not make sense. It is a strange legal situation and Argentina is trying hard to get the order vacated

Posted at 18:20 on Tue, 29 Mar 2005     View/Post Comments (0)     permanent link


This is a test

This is a test posting. Please ignore.

Posted at 15:39 on Tue, 29 Mar 2005     View/Post Comments (3)     permanent link


Sat, 26 Mar 2005

Coming Soon

I am in the process of setting up my blog using Blosxom. Why Blosxom?

  1. It is open source so that I can use and customize it the way I like
  2. It does not use MySql or PHP. So I do not have to go to my web administrator to set up MySql accounts and other permissions. Yes, it needs CGI access, but I already have this and I would not dream of hosting my website on a server that does not give me this
  3. It is written in Perl, so I do not have to learn yet another programming language
  4. The core of Blosxom is small enough (less than 500 lines) so that it is easy enough to understand and modify. But, a large number of plugins are available to add whatever functionality is desired. This site uses the following plugins:

Posted at 12:15 on Sat, 26 Mar 2005     View/Post Comments (0)     permanent link