Bondholder

The government lenders who formed a creditor committee - co-chaired by China and France and deputy chaired by South Africa - sank the recent bondholder deal because they the bondholders would be given 18 cents more on the dollar than they were offered.

Two key bondholder groups have since criticized a lack of engagements with the government and pushed for stronger legal protection in any deal.

For issuers, the decision to impair bondholder rights may make sense–at least in the short term. Bondholders generally don’t live in these jurisdictions in great numbers.

Certain government bonds could not be redeemed without the consent of the bondholder and had been issued when interest rates were high; consequently each bond represented a long-term drain on public finances, as bonds were hardly ever redeemed.

The bondholder has about 1 month to convert it, or the company will call the bond by giving the holder the call price, which may be less than the value of the converted stock.