In debt exchanges, companies typically ask creditors to swap current debt for equity, new debt with a lesser value that matures later, or a combination of the two.

WSJ: Choices Shrink For Subprime Set

One way to encourage them along the road to the financial guillotine would be through debt exchanges whereby their devalued bonds would be swapped for claims on debt guaranteed by the EFSF.

ECONOMIST: Why the debt crisis is so hard to resolve

These hedge funds have previously rejected exchanges of their defaulted debt in 2005 and 2010.

BBC: Argentina default on debt likely, says Fitch

Every day, we read reports of escalating credit spreads on Greek sovereign debt, and CDS prices rising dramatically on exchanges.

FORBES: Who's The AIG In This Financial Greek Tragedy?

Investors are reliving a mini-Sept 2008, and further credit downgrades of developed country debt could just be enough to test the circuit breakers at some global securities exchanges.

FORBES: Asian Stocks Open Lower Thursday