A collective action clause (CAC) allows a supermajority of bondholders to agree to a debt restructuring that is legally binding on all holders of the bond, including those who vote against the restructuring. Bondholders generally opposed such clauses in the 1980s and 1990s, fearing that it gave debtors too much power. However, following Argentina's December 2001 default on its debts in which its bonds lost 70% of their value, CACs have become much more common, as they are now seen as potentially warding off more drastic action, but enabling easier coordination of bondholders.
External links 
- Haldane, Andrew G, Penalver, Adrian, Saporta, Victoria, Shin, Hyun Song (2005), "Optimal collective action clause thresholds", Bank of England Quarterly Bulletin, Spring 2005
- Martin Gunkel Oktober 2006, Bewältigung von Staatsinsolvenz durch collective action clauses?, Diplomica GmbH, Hamburg, ISBN 3-8366-5135-1, Zugl.: Berlin, Techn. Univ., Diplomarbeit, 2006. (It is a summary about the discussion of cac as instrument to solving state insolvency and include a rich literature review)