In addition to making prompt payment on valid claims arising from the severe economic meltdown in Argentina, Sovereign also made it possible for a number of its clients to effect conversion and transfer of regularly scheduled principal and interest repayments out of Argentina, thereby avoiding losses and enabling its bank clients to keep these Sovereign-insured loans performing and current. This loss mitigation was achieved via Sovereign’s status as a member of the Berne Union. At the height of the crisis in Argentina, the Argentine Central Bank decreed that borrowers who owe debts to lenders insured by a member of the Berne Union did not require prior approval of the Central Bank to convert and transfer funds to make payments of principal or interest on the insured loans. Notwithstanding the exchange controls in place in Argentina in 2002 – 2003, lenders were successful in converting and transferring almost $100 million in scheduled payments because they were insured by Sovereign.
