Rufo clauses best avoided, says Cavallo

Rufo clauses best avoided, says Cavallo

Corporate & Sovereign Strategy

Sovereigns should avoid committing to Rights Upon Future Offer (Rufo) clauses in debt restructurings, Domingo Cavallo, former Argentine economy minister says. In an opinion article for LatinFinance, Cavallo says borrowers should try to use exit consent clauses, or another mechanism to ensure broad participation, when negotiating debt restructurings with bondholders. “In no case should the new bonds include a Rufo clause,” he writes. Argentina’s debt position is worse than it was in December 2001

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