Do Bondholders Care About Bankruptcy Access?

Theory tells us that bondholders care whether sovereign debtors have access to a bankruptcy process. Fear that bondholders would react to such access negatively is what tanked the IMF’s Sovereign Debt Restructuring Mechanism proposal a decade ago. But do bondholders really care about bankruptcy access, or do other things matter more? Our guest, Rich Schragger, is the author of City Power: Urban Governance in a Global Age, and an expert in local government law, urban policy, constitutional law and other matters. He also (along with Mitu) recently attempted to examine this question in the context of US municipal debt by looking at the disclosures made by borrowers about whether they do or do not have bankruptcy access. In this podcast, we ask Rich about his work on local governments, fiscal constitutionalism, city power and, of course, whether access to bankruptcy is as important as theory would suggest.

Producer: Leanna Doty