Western government creditors should, in all cases, be accorded equal or paripassu treatment with private bank creditors in debt rescheduling negotiations.
Western government creditors should, in all cases, be accorded equal or paripassu treatment with private bank creditors in debt rescheduling negotiations, which is not now the case.
Adams says that if the deal goes through, those notes should trade paripassu, that is at the same yield, so expect the Teppco issue to outperform the Enterprise notes.
This matters because loans from the EFSF rank paripassu with loans provided by private-sector investors to a buckling sovereign borrower such as Spain, but credit from the ESM would be senior to private sector loans.