Episode Details

This episode is the due diligence framework a GP or LP should apply to any sovereign debt instrument where the restructuring terms were set by a creditor committee — and where the back-loaded payment schedule assumes a fiscal capacity the sovereign has never historically sustained.

We cover: the three structural features that combined to produce the 2001 cliff — floating rate, back-loading, collateral drain — the three diagnostics from public documents that identified the risk before IMF emergency negotiations began — the four questions any sovereign fixed income allocation should answer before taking restructured EM debt exposure — and the active signal: where back-loaded sovereign obligations designed for optimistic scenarios are running in current EM debt structures today.

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In 1992, Argentina's Brady bond prospectus contained the payment schedule, the floating rate terms, and the collateral requirements. The IMF's Article IV reports contained the fiscal trajectory. The Federal Reserve held the collateral that reduced Argentina's usable reserve buffer. All three documents were public. The combination was the signal — nine years before the default.

The Forensic Data Sheet is on Substack. Link in bio.

Every collapse has a pattern. We dissect it. Layer by layer.