GBSA has endorsed new Collective Action Clause language for Middle East sovereign bond contracts.

By 15/02/2015

GBSA has endorsed new Collective Action Clause language for Middle East sovereign bond contracts.

PRESS RELEASE


GBSA has endorsed new Collective Action Clause language for Middle East sovereign bond contracts.


Dubai, February 15, 2015 – The Gulf Bond and Sukuk Association (GBSA), the trade association representing the Arabian Gulf fixed income market has endorsed proposed standard language for collective action clauses and pari passu clauses for sovereign bond contracts.

The language would enhance the predictability and orderliness of sovereign debt restructurings by bolstering existing “collective action clauses” through the introduction of a single vote mechanism that would bind all bondholders to a restructuring proposal, as long as 75 percent of bondholders vote in favor.

The President of the GBSA, Michael Grifferty, said: “Collective action clauses have demonstrated their value as a means of avoiding long and costly disputes such as that involving Argentina.” Stuart Anderson, Managing Director and Regional Head, Standard & Poor’s Middle East, and Chair of the GBSA Regional Steering Committee said, “Broad application of this language can strengthen contractual frameworks and further align Middle East sovereigns with global best practice.“

The new language was drafted by market participants along with international financial institutions, issuers, academics, and lawyers. The documents and further information are available on the website of International Capital Market Association: http://www.icmagroup.org/resources/Sovereign-Debt-Information/

The GBSA’s sub-committees, working groups and National Chapters bring together the thought leaders of the regional credit markets to create a more collective voice on key issues affecting the industry.

NOTE FOR EDITORS:

The Gulf Bond and Sukuk Association The Gulf Bond and Sukuk Association (GBSA) is the regional trade association representing the Arabian Gulf bond and sukuk market. GBSA is involved in all major matters concerning development of bond markets in the region.

For further information please contact:
Michael P. Grifferty
President
The Gulf Bond and Sukuk Association
info@gulfbondsukuk.org
www.gulfbondsukuk.org
TEL: +971.4.401.9944