Argentina’s sovereign bond
restructuring in 2005 reopened the debate surrounding
interpretations of the boilerplate clause
The pari passu fallacy had a deceptive appeal. It posited
that a standard contractual provision, the pari passu clause,
promising that a debt would rank equally with the borrower's
other senior indebtedness, must also imply an obligation on the
part of the borrower to pay all equally-ranking debt ratably
(the ratable payment interpretation). After a life span of 18
years, it appears that the pari passu fallacy is at last being
laid to rest....