Making a Voluntary Greek Debt Exchange Work
In March 2012, Greece conducted one of the largest and most successful sovereign debt restructurings ever. It is likely that the techniques used in the 2012 Greek restructuring will form the template for many sovereign restructurings that take place in the near future. It is illustrative, in that sense, to try and learn from what was done. It is perhaps equally useful to look back at the options that were on the table at the time and were ultimately not used.
Even as late as January 2012, when this essay was written, the precise contours of how the Greek restructuring would take place were unclear. This Essay sets forth our thinking roughly a month and a half prior to the restructuring; a time at which we and others in the sovereign debt business were thinking hard about which methods had the best chance of working.