Originally Posted by
Sunfish
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Pari Passu means that all members of the same class of creditor have to be treated EQUALLY. That also extends through time. If that were not the case, companies could finance themselves forever by defaulting on their current debt and then taking on new debt, then defaulting, rinse and repeat.
The practical market for defaulted bonds revolves around buying worthless national bonds and then, when the country tries to borrow more from the IMF, world bank, etc. sticking it to them to pay out their existing bonds before they can borrow again. Patient traders make lots of money this way.
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DIGRESSION ALERT
Only read this article if the words
Trump, China & Bonds interest you. Slightly relevant to this story only.
https://www.bloomberg.com/news/artic...que-china-debt