It was argued that such clauses would help to overcome coordination problems between a sovereign debtor and the numerous bondholders since they enable a qualified majority of creditors to agree on the terms of a restructuring, which is also binding for the dissenting creditors. But more time was needed to convince issuers and market participants of the usefulness of these clauses.
And it also needed Mexico to overcome the first-mover problem in February last year. Since last year, a remarkable convergence of market practice has taken place. In the first six months of this year, practically all bonds issued under New York law included collective action clauses, while worldwide some 83% of all foreign currency sovereign bonds included such clauses.