Clifford Chance

Euro area member states take collective action to facilitate sovereign debt restructuring

28 November 2012

A new agreed form of model collective action clause for euro area member states to adopt (the Model CAC) in respect of their sovereign debt was published by the EFC Sub-Committee on EU Sovereign Debt Markets in March 2012. Following the publication, Germany is the first country to have passed legislation to implement a form of model collective action clause into national law. From 1 January 2013, all euro area sovereigns will be required to include the Model CAC in both international and domestic government securities. With the January 2013 deadline looming and some sovereigns already starting to adopt the new Model CAC, other countries are anticipated to follow suit in the near future. This briefing describes the background to the new Model CAC and answers some "Q&A". It also includes a table comparing the new Model CAC provisions with the International Capital Market Association (ICMA) collective action clauses published in 2004.

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