(g) Security agreement means an agreement between a grantor and a creditor, in whatever form or terminology, that creates a security right.

Heavily indebted middle income countries must organize their efforts to arrive at joint agreements with the world's creditors.

(3) to set down the scheme for debt disposal or inheritance through negotiating with the creditors

15. Regarding the debt problem, his Government had signed an agreement with the Paris Club on a comprehensive mid term restructuring of its debt, and another accord with the creditors of the London Club on rescheduling its commercial debt.

The law should specify that a security right is created by agreement between the grantor and the secured creditor which is in writing signed by the grantor in accordance with recommendation 12 that evidences the intent of the grantor to grant a security right or is accompanied by delivery of possession pursuant to the agreement and in accordance with recommendation 9.

1. The debtor may agree with the assignor in a writing signed by the debtor not to raise against the assignee the defences and rights of set off that it could raise pursuant to article 18. Such an agreement precludes the debtor from raising against the assignee those defences and rights of set off.

20 The World Bank took the lead in coordinating some 20 multilateral creditors.

Subject to article 19, the assignor, the assignee and the debtor may derogate from or vary by agreement provisions of this Convention relating to their respective rights and obligations. Such an agreement does not affect the rights of any person who is not a party to the agreement.

In the insolvency of a non grantor debtor, the creditor is an unsecured creditor with an unsecured claim against the non grantor debtor.

The law should specify that a security right is created by agreement between the buyer, grantor or financial lessee (hereinafter referred to as the grantor ) and the seller, secured creditor or financial lessor (hereinafter referred to as the acquisition financier ) which is in writing and evidences the intent of the grantor to grant a security right or is accompanied by delivery of possession pursuant to the agreement and in accordance with recommendation 9.

Sovereign debt restructurings with private creditors

A New Deal for Debt Overhangs?

(b) Agreement between participating Member States and the bond trustee.

(c) Such an agreement may be modified only by an agreement in a writing signed by the account debtor.

That arrangement would involve private creditors in negotiating terms of a restructuring the provision of financial support by IMF can improve the bargaining position of the debtor, and combined with the adjustment programme, can signal to the unpaid creditors that their interest is best served by quickly reaching an agreement with the debtor.

To the extent that the value of the encumbered asset is insufficient to satisfy the secured creditor's claim, the secured creditor may participate as an ordinary unsecured creditor.

Article 27Where an enterprise (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability.

As the purpose of article 19 was to ensure the protection of the interests of all creditors, without favouring any specific category, it was suggested that the proposed amendment should not be adopted.

2. An agreement concluded after notification of the assignment between the assignor and the debtor that affects the assignee's rights is ineffective as against the assignee unless

(c) Notwithstanding paragraphs (a) and (b) of this recommendation, defences and rights of set off that the account debtor may raise pursuant to recommendations 15 and 16 against the assignor for breach of an agreement limiting in any way the assignor's right to make the assignment are not available to the account debtor against the assignee.

recognition 67 71 16 Article 19.

quot (2) A receivable is deemed to arise at the time when the original contract is concluded or, in the absence of an original contract, at the time when it is confirmed in an agreement between the creditor and the debtor or in a court order .

(b) Provide a temporal event for ordering priority among secured creditors and between a secured creditor and other classes of competing claimants.

1. An agreement concluded before notification of the assignment between the assignor and the debtor that affects the assignee's rights is effective as against the assignee, and the assignee acquires corresponding rights.

The Working Group considered the importance of elaborating provisions that ensured adequate protection of the interests of all creditors, including creditors in the enacting State.

Table 3 Recent sovereign debt restructurings with private creditors main features

The refinancing agreements were to be completed by March 1998 but would be voluntary on the part of creditors.

Two recommendations dealt with creditor participation in reorganization proceedings (a) to limit the number of creditor committees to a single committee, except in extraordinary circumstances and (b) in smaller reorganization cases where creditors might have little interest in forming a committee, to provide for the appointment of a creditors' representative to monitor the case and negotiate a reorganization plan on behalf of unsecured creditors.

(c) Ensure equitable burden sharing with private creditors

(b) An agreement concluded after notification of the assignment between the assignor and the account debtor that affects the assignee's rights is ineffective as against the assignee unless

Under the bank advisory committee approach, a borrower reaches an agreement with key creditors to endorse a set of terms (or menu of options) that are then presented to the entire community of bank creditors for their acceptance or rejection.

Proposals were made to replace the words quot secured claims quot and quot rights in rem quot , with reference to quot privileged claims quot , quot preferred claims quot or other expressions with a similar meaning.

The law should provide that the security agreement must, at a minimum, identify the secured creditor and the grantor, and reasonably describe the secured obligation and the assets to be encumbered.

(a) An agreement concluded before notification of the assignment between the assignor and the account debtor that affects the assignee's rights is effective as against the assignee, and the assignee acquires corresponding rights

(ii) A creditor of the assignor or

A note of caution was struck, however, in that regard, to the effect that such laws needed to strike an appropriate balance in the treatment of privileged, secured and unsecured creditors so as to become acceptable to States.

(a) The title of a creditor who retains title to goods to secure payment of the purchase price of the goods or its economic equivalent under a financial lease or hire purchase agreement and

The law should provide that a secured creditor with a security right that is not effective against third parties has towards third parties no right other than as an unsecured creditor priority over unsecured creditors unless the unsecured creditor has taken steps to reduce its claim to a judgement or the grantor has become insolvent .

Since it was not feasible to introduce a harmonized rule on that question, and since it was necessary to protect creditors from losing their claims because of a stay pursuant to article 16(1)(a), paragraph (3) had been added to authorize the commencement of individual actions to the extent that it was necessary to preserve claims against the debtor.

Because healthy competition among all potential creditors is an effective way of reducing the cost of credit, the Guide recommends that the secured transactions regime apply equally to various creditors, including banks and other financial institutions, as well as domestic and non domestic creditors.

(e) Protection of the insolvency estate against the actions of creditors, the debtor itself and the insolvency representative, and where the protective measures apply to secured creditors, the manner in which the economic value of the security interest will be protected during the insolvency proceedings

209. In this context, the Heavily Indebted Poor Countries Debt Initiative endorsed by the Interim Committee of the International Monetary Fund and the Development Committee of the World Bank and the International Monetary Fund, which is designed to enable eligible heavily indebted poor countries to achieve a sustainable debt situation through coordinated action by all creditors on the basis of adjustment efforts by the debtor countries, is welcomed.

The lessons learned point to the need to reach an international understanding on debt restructuring modalities (including voluntary code and international arbitration or mediation mechanisms) which would bring together official and private creditors in a collaborative and constructive dialogue with a view to resolving debt problems in an expeditious and timely manner and to equitably protecting the interests of debtors and creditors.

(172) The insolvency law should specify whether secured creditors are required to submit claims.

Proposal by International Association of Restructuring, Insolvency and Bankruptcy Professionals (INSOL)