Key points

• This article notes the deep theoretical justification for state-contingent debt instruments, and the extensive real-world corporate use of contractual terms for limited cashflow deferral (ie ‘PIKs and toggles', ‘hybrids’).
• It explains why past attempts to use contingent instruments for sovereigns have failed to gain market acceptance, noting issues such as lack of analytical tractability, absence of pricing metrics, and failure to fit the needs of fixed income investors by falling outside of key fixed-income bond indices.
• The article proposes a specific form of flexible coupon and principal terms that are appropriate for sovereign bonds, and considers the conditions under which these could be invoked while balancing the interests of creditors and debtors.
• Finally, the article argues that these contractual terms address the flaws of past instruments and could follow the Collective Action Clauses into widespread adoption, dovetailing naturally with the goals of the Debt Service Suspension Initiative.

中文翻译：

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宁愿推迟：“Bendybonds”的时间终于来了吗？

关键点

• 本文指出了国家或有债务工具的深刻理论依据，以及在现实世界中企业广泛使用合同条款进行有限现金流递延（即“PIK 和切换”、“混合”）。
• 它解释了为什么过去对主权国家使用或有工具的尝试未能获得市场认可，并指出了诸如缺乏分析易处理性、缺乏定价指标以及因脱离关键固定收益而未能满足固定收益投资者的需求等问题债券指数。
• 文章提出了一种适用于主权债券的具体形式的灵活息票和本金条款，并考虑了在平衡债权人和债务人利益的同时可以援引这些条款的条件。
• 最后，文章认为，这些合同条款解决了过去文书的缺陷，并且可以遵循集体行动条款被广泛采用，自然地与债务服务暂停倡议的目标相吻合。