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sovereign debt, pari passu, sovereign bonds, Santa Anna, Black Eagle bonds, internal debt, international finance, debt restructuring, creditors


One of the most debated issues in international finance is the meaning of the pari passu clause in sovereign bonds. The clause is ubiquitous; it is in almost every single foreign-law sovereign bond out there. Yet, almost no one seems to agree on its meaning. One way to cut the Gordian knot is to track down the origins of the clause. Modern lawyers may have simply copied the clause from the documents of their predecessors without understanding its meaning. But surely the people who first drafted the clause knew what it meant. Four enterprising students at Duke Law School may have found the very first sovereign bond to contain a pari passu type provision; General Santa Anna's Black Eagle. This Essay tells the story of that bond and its equal treatment clause.

Library of Congress Subject Headings

Debt relief, Debtor and creditor, Bonds, Government bonds, Public debts, Mexico, Bonds--Law and legislation, International finance