This document describes a special purpose vehicle that would securitize a pool of international bonds. The special purpose vehicle would issue trust certificates representing fractional interests in the underlying bond pool. These certificates could then be subscribed to by entities that owe debts to the bond-issuing country, allowing them to legally set off and cancel their debts at a discounted rate through the purchase and retirement of the bond certificates. The program aims to monetize the intrinsic bond value, preserve bondholder claims, generate liquidity, and stimulate market-driven resolution of defaulted sovereign debt.

1. Special Purpose Vehicle
Fractional Interest Trading / International Debt Setoff Currency
Appraised Fully Honored
Originator Placement of Securitization Redemption Value per £20
Quantity of Bonds Trust Bond
into Trust (“SPV”)
$10 Million
Example
Finite Quantity Contracted Discount
Bond Pool Example
65%
Proceeds
from Sale(s)
Create Series of Trust Allocation
$25,000 Trust Certificates
20,000
Available for Subscription £20 Bonds
by Offerees (PRC Debtors
Joint Program
Including SOE Debtors) Number of $25,000 Trust
Certificates
Retained 2,800,000
or Carried
Interest in
Trust
Asset Pool
Issue Fractional Interest Certificates
Trust Certificates Evidencing Separate
Undivided Interests in Underlying Bond Pool
Advantages
PRC Debtors
Pool (Offerees) 4 Monetizes Intrinsic Bond Value
Manager Secondary Market Trading 4 Preserves Bondholder Claims
/ Broker International 4 Generates Bondholder Liquidity
Debt Setoff Certificates of Beneficial Interest 4 Stimulates Market-Driven
Currency
Resolution from Trading Activity
Inter-Bank Market for Defaulted Sovereign Debt 4 Broadens Stakeholder Base
Optional
Private Dealers / Financial Institutions 4 Enables Parties Indebted to the
Discounted PRC (Including State Owned
Cancellation / Luxembourg Exchange-Listing Enterprises) to Subscribe
Exchange Extinguishment Fractional Interests in the Bond
Listing of Debts Owed
PRC Pool and Legally Setoff and
Cancel Such Debts at a Discount
®
Sovereign Advisers