The premise that only a credible default ensures significant private-sector involvement (that is, that private bondholders take a real hit) is apparent when we compare the market-friendly Uruguayan debt exchange in 2003 with the draconian Argentine restructuring of 2005. In Uruguay, what the authorities presented as a voluntary transaction produced no nominal haircuts and only minor debt relief; in Argentina, a four-year debt moratorium was essential to achieving nominal haircuts above 50%.