Argentina Settles Defaulted Japanese Yen Bonds
March 1, 2019
Cleary Gottlieb represented the Republic of Argentina in the settlement of all remaining defaulted Series 4°, 5°, 6°, and 7° Japanese yen bonds (samurai bonds).
Argentina defaulted on the samurai bonds in December 2001. While some of the bondholders participated in the 2005 and 2010 exchanges, litigation was brought against Argentina on behalf of the holdout creditors. In furtherance of Argentina’s February 2016 settlement proposal, bondholder meetings were convened. On February 22, 2019, bondholders of the samurai bonds approved under the bonds’ collective action clauses (CACs) Argentina’s settlement proposal by the requisite majority. Since Uruguay’s reliance on the CACs in 2003, no other sovereign had used existing CACs to restructure debt. Upon Argentina’s payment of the settlement amount, all of the outstanding obligations of Argentina under the samurai bonds will be discharged.
The settlement represents a keystone in Argentina’s efforts to normalize relationships with the international financial markets, putting an end to the samurai bonds default. Holders of the samurai bonds join a wide majority of Argentina’s creditors throughout the world who have taken advantage of its February 2016 settlement proposal.