about how they want to crack down on vulture funds. A bill introduced last week targets just those funds — while leaving the broader market structure unscathed.There's serious disagreement in the world of sovereign debt about whether vulture funds are even a problem anymore.
Vultures are funds that buy up debt that's either in default or about to go into default, at much less than face value. They then sue to be repaid in full, with interest.of dollars — money that came directly out of a poor government's budget. Today, such tactics are much more difficult. Most sovereign bonds have collective action clauses, which mean that once a supermajority of bondholders has agreed to a restructuring, would-be vultures get forced to participate whether they like it or not.have been circulating in Albany, whose power comes from the fact that about half of the market's bonds are governed by New York law.
"Conventional investors," she writes, will continue to be allowed to sue for what they're owed in court.The way the bill is structured is quite clever. If vulture investors aren't a problem then it will cause no harm; if they pose a threat then it has real teeth. While the other bills aren't entirely dead, they probably won't find the support needed to get passed if the champerty bill makes it through.Share on linkedin