Western government creditors should, in all cases, be accorded equal or pari passu treatment with private bank creditors in debt rescheduling negotiations.
Western government creditors should, in all cases, be accorded equal or pari passu 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 pari passu, that is at the same yield, so expect the Teppco issue to outperform the Enterprise notes.
This matters because loans from the EFSF rank pari passu 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.