In a model with both issues of sovereign debtor moral hazard and creditor coordination under incomplete information, we show that the resulting conáict between ex ante and interim e¢ ciency limits the welfare impact of strengthening CACs. Conditional on default, we show that an interim e¢ cient CAC threshold exists and improving creditor coordination results in welfare gains. However, when ex ante e¢ - ciency requires the sovereign debtor to choose actions that reduce the probability of default, improved creditor coordination reduces ex ante e¢ ciency and the interim effcient CAC threshold is higher than the ex ante efficient CAC threshold.