Argentina's debt restructuring triumph

Argentina's debt restructuring is finished, and, for anybody who remembers Argentina's last debt default, this one was gloriously smooth.

By the numbers: Argentina restructured $69 billion in foreign bonds, plus another $42 billion in foreign currency local law bonds. The country negotiated a reduction in its effective interest rate from 7% to 3%, which translates to a creditor "haircut" of about 45 cents on the dollar in present-value terms.

• Most impressively, the first exchange offer was presented to bondholders on April 21; the deal was done by early September. That's a far cry from the decade-long litigation that we saw last time around.

How it works: Argentina managed to get 99% participation on both the local-law and foreign-law exchanges. In order to get there, it used collective action clauses, or CACs: if enough bondholders of a certain bond voted to restructure, then all of them would be bound into the deal.

• That's how 99% of the bonds ended up being exchanged, even though only 93.5% of them voted in favor of the deal.
• It's a prime example of CACs working exactly as they were designed to work.

The bottom line: Argentina is a serial defaulter. Maybe practice makes perfect.