Fiscal Agency Agreements And Trust Deeds

A bond issue will require either a fiscal agent or a trustee. If a fiscal agent is appointed, a Fiscal Agency Agreement will be agreed. A fiscal agent is designated by the issuer, usually a bank, and functions as the issuer's representative, to whom it is accountable for its obligations and responsibilities. A fiscal agent is designated by the issuer and functions as the issuer's representative, to whom it is accountable. In Argentina during a default, there was no trustee under the fiscal agency agreements to act for investors and each bondholder had to sue Argentina individually in New York courts. This created chaos as some investors refused restructuring and kept suing while other accepted the exchange offer at a steep discount. The result was litigation dragged for more than a decade.