orang3eph

I think it would depend. If the borrower is actually on the verge of default, then the lender would lose his investment right ? Look at the problems in Greece, I do not want to simplify the Greek problem as it is extremely completed, but lenders had to agree to an haircut which reduced the actual value of the debt. If we consider that Greece had difficulty respecting its debt repayment deadlines, then we could say that it is possible for the lender and borrower to come to certain agreements concerning bond principal repayment. This is an overly simplified example though. Anyone please correct me if I am wrong.