Like Argentina, our immediate southern neighbor from time to time likes to go cap-in-hand for some cash in New York. But Mexico is putting all of you, and especially the Elliott Management chief, who it sees eyeing its notes from time to time, on notice: If it should have some trouble paying its bills in the future, and those bills are coupon payments on debt it issues from now on, you’re going to have to buy a hell of a lot of it to avoid a close crop come restructuring time. And even then, you might not be able to make it pay.
This week, the Mexican government made a United States securities filing for an issue of bonds that would include new, improved collective action clauses specifically written to keep holdout investors like Mr. Singer at bay.
Vulture investors will be required to accumulate a much larger position in order to block a debt restructuring agreement by the majority, and the dreaded pari passu clause – which holds that all investors be treated equally – has been stripped of much of its power.