Attributes and articulation of private creditorson the Argentinian international subnational bonds restructuring 2020/1

Abstract

Abstract: The insertion of subnational States in the international financial market is a relatively recent and slight studied phenomenon. Between 2016 and 2018, fourteen Argentinean provinces issued debt securities in currency and under foreign Law. Two years later, most of them, immersed in a deep crisis, had to restructure them. The relief obtained in this process was far from what was originally expected, with negative consequences for the economy and human rights. This article seeks to provide elements that help understand the reason behinds this outcome, analyzing the characteristics and organizational dynamic of its international private creditors. The paper shows that this outcome was largely due to the marked imbalance of bargaining power–in terms of size, scale and mode of articulation– that existed in favor of creditors and in detriment of provinces. It is argued that, beyond the particularities of the specific case, this imbalance has its roots in the structural concentration of the international financial market and in a restructuring regime that tends to isolate debtor States in these processes and group their creditors.