21-3 Institute of International Finance ("IIF")

U.S. DEPARTMENT OF JUSTICE
Antitrust Division
MAKAN DELRAHIM

Assistant Attorney General

Main Justice Building
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530-0001
(202) 514-2401 / (202) 616-2645 (Fax)

January 14, 2021
Timothy Cornell
Clifford Chance US LLP
2001 K Street NW
Washington, DC 20006-1001
Dear Mr. Cornell:
This letter responds to your request, made on behalf of the Institute of International Finance
(“IIF”), for the issuance of a business review letter pursuant to the Department of Justice’s
Business Review Procedure, 28 C.F.R. § 50.6. Specifically, you have requested a statement of
the Department’s present enforcement intentions with respect to the IIF’s proposal to publish a
set of voluntary Principles for Debt Transparency (“Principles”) that would make public certain
information about sovereign debt taken on by various countries. Based on the information and
representations you provided, and for the reasons explained below, the Department does not
presently intend to challenge the Principles.
I. Factual Background
All facts set forth in this section regarding the Institute of International Finance and the proposed
Principles are based on your representations to the Department.
The IIF is a global finance trade association, comprised of approximately 450 members (from 70
countries) from various stakeholder groups of the finance industry, including banks, hedge funds,
insurance companies, and sovereign wealth funds, among others. Their stated mission is to
support the financial industry by developing sound industry practices and advocating for
regulatory, financial, and economic policies.
II. The Principles
The IIF is considering publishing the Principles, which would allow for the disclosure of certain
information about the issuance of sovereign debt. The Principles contemplate that lenders would
report, after at least 60 days and upon agreement with the borrower, information about the
sovereign debt agreement including:

January 14, 2021
Pa
ge 2
(i) identification of the borrower (or equivalent);
(ii) identification of the guarantor or provider of indemnity (if any) or equivalent, the
beneficiaries of the guarantees/indemnities or equivalent and maximum amount
payable thereunder;
(iii) type of financing;
(iv) for bilateral financings, the lender (or equivalent) at signing;
(v) for syndicated financings, the mandated lead arrangers and the facility agent (or
equivalent) at signing;
(vi) applicable agent/trustee/transaction intermediary (for syndicated deals or those
with multiple providers of financing/underwrites);
(vii) ranking (e.g., senior, subordinated, etc.);
(viii) amount that can be borrowed/raised and details of disbursement period, if
prolonged;
(ix) applicable currency or currencies;
(x) repayment or maturity profile;
(xi) interest rate (or commercial equivalent) within ranges;
(xii) intended use of proceeds on drawdown;
(xiii) governing law;
(xiv) extent of waiver of sovereign immunity;
(xv) dispute resolution mechanism; and
(xvi) applicable collateral/security/assets subject to repo.
The exact nature and scope of the information disclosed would be subject to agreement between
the lender and borrower. The Principles are intended to cover many types of financial
arrangements, including “any arrangements, irrespective of their form, which have the economic
effect of borrowing; and any guarantee or other assurance provided against such arrangements.”
You represent that the Principles are voluntary, and cover transactions not only entered into by
the sovereign but also those entered into by sub-sovereigns, as well as those transactions entered
into by others but guaranteed by the sovereign or sub-sovereign. You contemplate that
information will be disclosed between 60 and 120 days after the debt is encumbered.
III. Analysis of the Principles
The Transparency Principles you propose contemplate a type of information exchange among
competitors. Under the antitrust laws, information exchanges among competitors are generally
analyzed under the “rule of reason.”
1
A rule of reason analysis is a flexible inquiry that focuses
1
See U.S. DEP’T OF JUSTICE AND FED. TRADE COMM’N, ANTITRUST GUIDELINES FOR COLLABORATIONS
AMONG COMPETITORS (2000), available at
https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-
guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf [hereinafter Collaboration

January 14, 2021
Pa
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on those factors necessary to evaluate the overall competitive effect of an agreement. More
specifically, rule of reason analysis focuses on the state of competition with, as compared to
without, the relevant agreement. The central question is whether the relevant agreement likely
would harm competition by increasing the ability or incentive profitably to raise prices or reduce
output, quality, service, or innovation relative to what likely would prevail in the absence of the
relevant agreement. Various criteria are considered in assessing the legality of an information
exchange, such as the parties’ intent in sharing the information, the nature and quality of the
information shared, and the structure of the information exchange, including safeguards
implemented to minimize the risk that competitively sensitive information will be disclosed.
There does not appear to be a substantial risk of anticompetitive effects in this case for the
following reasons.
First, the business purpose of the Principles does not appear to be either directly or indirectly
anticompetitive or designed to further coordination among private lenders to sovereign
borrowers. The business purpose of the Principles is to enhance transparency in the sovereign
debt markets in order to strengthen the credibility in sovereign fiscal plans, reduce the risk of
adverse economic and social consequences resulting from undisclosed public liabilities, promote
sound practices in public debt management, and increase efficiency in the market for sovereign
debt financing.
Second, the nature of the information that will be shared is unlikely to facilitate tacit or explicit
price-based or other anticompetitive coordination among competitors. You represent that the
disclosure guidelines are limited to the categories of information about a government’s liabilities
that are necessary to permit an accurate and complete debt sustainability analysis. For example,
disclosure of interest rate information within broad ranges after the issuance of a private loan, as
you have proposed, would provide valuable information to the market and the public about the
present value of a loan and the government’s ability to service the debt. You further represent
that disclosure of individual loan information is voluntary and requires the agreement of the
borrower.
Third, the Principles contain several safeguards that are intended to mitigate the risk of
exchanging any competitively sensitive information among competitors. As described above,
potentially competitively sensitive information such as interest rates would only be disclosed in
ranges (e.g., 1-3%, 4-7%, 8-11%, etc.). In addition, disclosure of debt information would be
delayed, occurring no earlier than sixty days after the date on which funds first move in
connection with the financing transaction. The disclosed information would also be collected and
maintained by a “Reporting Host,” an appropriate international financial institution (i.e., not a
private sector lender or borrower).
It is also possible that the Principles will have procompetitive effects. The proposed disclosure is
intended to generate efficiencies in the sovereign debt market by contributing to more informed
Guidelines]. The Collaboration Guidelines provide a general outline of the analytical framework for
evaluating collaborations among competitors.

January 14,
2021
Page 4
sovereign
debt financing
decisions. You
represent that the
lack of transparency
in the
sovereign
debt market
increases transaction
costs and
results in less
efficient pricing.
Your Request
Letter
also states that,
to the extent
creditors may use
the publicly
available information
to compete
for
loans with sovereign
borrowers,
they will be
doing so on a more
equal footing
and with more
reliable data. As
positive outcomes
of debt
transparency begin
to manifest, you
represent that
the
market for
sovereign debt financing
will increase,
as more
creditors will be
open to providing
loans and guarantees
to countries
previously
deemed to be at
high-risk for
default.
Finally, there
appear to be
numerous other
benefits in the public
interest from
improved
transparency in the
sovereign debt
market, including
better governance
and
accountability;
improved fiscal
discipline and risk
management
practices; greater
confidence on
the part of
investors, lenders,
international financial
institutions,
and the general
public in the
sovereign debt
market;
and a reduction
in vulnerability
to market shocks
that result from
undisclosed
public
liabilities.
IV.
Conclusion
Based on your
representations
and the documents
and information
submitted in
support of your
request, the
Department has no
present intention
to challenge
the Principles,
as drafted.
However, there
are number
of implementation
details that
have not been
fully developed in
the
current proposal.
The Department
assumes
that those details
will follow the
same
procompetitive
ideals embodied
in the Principles,
but does not
and cannot
prospectively
opine on any
details not
included in the
letter.
This letter expresses
the
Department's current
enforcement
intention and is
predicated on
the
accuracy of the
information that
you have presented
to us, as
well as any
additional qualifications
set forth
in this letter.
In accordance
with its normal
practice, the
Department
reserves the
right to
bring
an enforcement
action in the
future if the
actions of the IIF
regarding the
implementation
or
operation
of the Principles
produce
anticompetitive
effects in any
market.
This statement
is made in
accordance with the
Department's
Business
Review Procedure,
28
C.F.R.
§ 50.6, and
subject to the
limitations and
reservations
of rights therein.
Pursuant to
its
terms, your
business
review request and
this letter
will be made
publicly available
immediately,
and any supporting
data you
submitted will
be made
publicly available
within thirty
(30) days of
the
date of this
letter, unless you
request that
part of the
material be withheld
in accordance
with
Paragraph 10(c)
of the Business
Review
Procedure.
Sincerely,
Makan Delrahim