Daniel Reichert-Facilides

NY & Hamburg Bar • #SovereignDebt Reform, Energy & Infrastructure Finance

[NAKAMURA Kazuhiko @NAKAMUR37392668]

Very timely and thought-provoking analysis. High expectations for further elaboration in subsequent work @federica_paddeu @WaibelM09 (3/3)☟
https://t.co/ekSNkR77Fv

[Finance for Development Lab @FinDevLab]

🚨 New Blog! 🚨 @DFacilides examines key shifts in the FfD4 Outcome Document's paragraph 50 on sovereign debt. Discover what it means for global finance. Read more via link in comments👇 #FfD4 #DevelopmentFinance #Legislation #Finance

[Daniel Reichert-Facilides @DFacilides]

@BiltoftCN @flandreaumarc Gottlob, durch meine Fenster bricht / Französisch helles Tageslicht ;-)

[Daniel Reichert-Facilides @DFacilides]

@ClaudiaPotsdam @Ricarda_Lang Hmm - wieso Perspektive? Und welche (oder wessen) Vernunft?

[Daniel Reichert-Facilides @DFacilides]

@Otto_Fricke @TillMansmann Zw 1949 und 1960 lag der Anteil öff Investitionen in der BRDtl insges auch schon mal bei 30%. Transformationsprozesse, so wie damals der Wiederaufbau und heute die Umstellung von Energie-, Verkehrs- und TK-Infrastruktur, gehen halt typischerweise mit höherem Staatsanteil einher.

[Daniel Reichert-Facilides @DFacilides]

@michaelxpettis @FT By now, the disagreement is not so much on the debt brake (which most people accept as flawed) but on how much social benefits the Germany on can/should afford.

[Daniel Reichert-Facilides @DFacilides]

@PhilippaSigl @pkrohn1 @DezernatZ Vielen Dank für‘s Kommen - jetzt sind wir nochmal mehr gespannt, ob und wie sich die Schuldenbremse aus den Fängen der Juristerei wird befreien können ;-)

[Daniel Reichert-Facilides @DFacilides]

Compelling case for enhanced use of domestic currency debt by emerging market borrowers 👇

#3. could be further expanded to using domestic currency debt as a simplified form of VRIs in sov debt restructurings. That wld also address concerns expressed in https://t.co/JXqzEi5cDX https://t.co/kPLXyxfHJ7

[Daniel Reichert-Facilides @DFacilides]

@RikeFranke A (very) benign explanation would be that this is part of a coordinated EU good cop/bad cop strategy.

[Gregory Makoff @GMakoff]

Heading into New York's 2025 legislative session, it's a good time to review what we learned during the 2023 and 2024 sessions about sovereign debt reforms at the state level.

@HarvardBizGov

https://t.co/N6BakeRPuT

[Daniel Reichert-Facilides @DFacilides]

Well, it’s always been a legal right, just subject to a higher threshold.

But NY lawmakers should indeed take note: If they want to proceed, they should follow the lead of the UK Debt (Dev Cts) Relief Act, which essentially enforced CoT & applies irrespective of governing law.

[Gregory Makoff @GMakoff]

New York lawmakers should pay attention to this. Shifting jurisdiction is more than a threat now, it’s becoming a legal right.

[Daniel Reichert-Facilides @DFacilides]

Not surprising, given the twists and turns of NY sovereign debt bills. Shows that any such legislation must apply irrespective of governing contract law as a matter of public policy to have a real impact.

https://t.co/VUErcuwB76

[Kevin Carey @Kevin_Carey_WB]

Sri Lanka Eurobond restructuring update: "A mechanism to change the governing law of the New York law governed new securities to English or Delaware law with the consent of a supermajority of bondholders ..."

[Daniel Reichert-Facilides @DFacilides]

Favorite quote from a new favorite episode of C&C:

‚Having creditors being able to move first and remove [the] sequential aspect that's been plaguing the sovereign debt restructuring process is another argument that we need some more clarity on the comparability assessment.‘

[Theo Maret @TheoMaret]

Had loads of fun geeking out with Mitu and Mark on Zambia and comparability of treatment -- bit of a fanboy moment joining Clauses & Controversies as a long-time listener

https://t.co/09f7Thspak

[Daniel Reichert-Facilides @DFacilides]

If VRIs are here to stay, the most simple and market-friendly arrangement would be to convert part of the old foreign debt to local currency (possibly still under NY/English law to improve liquidity) and allocate it pro rata to ensure CoT. That should tick all the boxes.4/4

[Daniel Reichert-Facilides @DFacilides]

In a nutshell, Lee & @GMakoff propose value recovery through mandatory prepayment of restructured debt in inverse order of maturities.

As VRI becomes the new normal, this looks like a win-win bc prepayment reduces creditors’ exposure while freeing up fiscal space.

Yet… 🧵1/4

[Gregory Makoff @GMakoff]

Sovereign debtors, creditors, and IMF staffers: Are you getting tired of overly complicated value recovery mechanisms?

Lee Buchheit and I propose a simpler—and more beneficial—alternative to use next time.

Just up on SSRN.

@HarvardBizGov
@CIGIonline

https://t.co/x0AYBin1QC

[Daniel Reichert-Facilides @DFacilides]

Also, the proposal doesn’t seem to address the core issues identified by @Brad_Setser @RivettiDiego et al.: how to define the trigger, how to calibrate the extra free cash and how to address asymmetry if benchmark data deteriorate vs DSA assumptions. 3/4

[Daniel Reichert-Facilides @DFacilides]

Parallel negotiations with different creditor groups now look like a realistic idea to improve the sovereign debt restructuring process. Here’s how a set of rules for the #CoordinatedFramework proposed by Sean Hagan and @Brad_Setser might read. 🙏🙏@RobinWigg and @FTAlphaville

[FT Alphaville @FTAlphaville]

Putting some flesh on the Hagan-Setser sovereign debt proposal https://t.co/rndSBxhSTL

[marc flandreau @flandreaumarc]

Flandreau Schule & Friends had great fun last week workshopping « States of Distress » at @SAFE_Frankfurt @KPatricio_ @ecovibi @a_capitalism @damianclavel @KimOosterlinck @DFacilides ❤️❤️❤️❤️ Thanks to
all of you

[Daniel Reichert-Facilides @DFacilides]

@lutzmache @PhilippaSigl Deformation professionelle - trotzdem finde ich, dass er hier in der Sache Recht hat: die Schuldenbremse war ein Fehler, den diejenigen korrigieren sollten, denen wir das gegenwärtige Schlamassel verdanken.