Sovereign Debt Repurchases
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Sovereign Debt Repurchases
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Author : Jeremy Bulow
language : en
Publisher:
Release Date : 1989
Sovereign Debt Repurchases written by Jeremy Bulow and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1989 with Commerce categories.
We show, in a reasonably general model, that if a highly indebted country has good investment projects available to it, then it will not benefit from using any of its resources to buy back debt at market prices. Debt buybacks and debt-equity swaps only make sense for the country if these programs are heavily subsidized by creditors. This result holds for all buyback programs large and small, so long as they involve voluntary creditor participation and are not part of a larger deal including offsetting concessions from lenders. Our analysis therefore casts doubt on the popular argument that unilateral debt repurchases benefit HICs by relieving "debt overhang."
A Primer On Sovereign Debt Buybacks And Swaps
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Author : Carlos I. Medeiros
language : en
Publisher: International Monetary Fund
Release Date : 2007-03
A Primer On Sovereign Debt Buybacks And Swaps written by Carlos I. Medeiros and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-03 with Business & Economics categories.
This paper sets forth some basic principles that could help debt managers in emerging market and other countries to plan and implement sovereign debt buyback and swap operations. It discusses the macroeconomic context in which buybacks and swaps are undertaken, the objectives of buybacks and swaps, the analytical framework for deciding whether to undertake a particular buyback or swap operation and for selecting among alternative operations, and some key issues in the determination of the strategy for executing buybacks and swaps. The focus is on developing the analytical framework for evaluating sovereign debt buyback and swap operations, since very little work has been done in this area. In this regard, the paper presents a step-wise decision-making procedure, in which discounted cash flow analysis and the use of strategic benchmarks for the debt play central roles.
Sovereign Debt
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Author : Mr.Vivek B. Arora
language : en
Publisher: International Monetary Fund
Release Date : 1993-07-01
Sovereign Debt written by Mr.Vivek B. Arora and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993-07-01 with Business & Economics categories.
This paper surveys the literature on sovereign debt that deals with the issues of a country’s ability-to-pay, its willingness-to-pay, and the policy responses to the debt crisis of the 1980s. The existence of an ability-to-pay problem suggests a need for debt reduction, but plans for debt relief face potential incentive problems, and sovereign debt repurchases are not always a welfare maximizing method of debt restructuring. The paper synthesizes the main conclusions on these issues. With a willingness-to-pay problem, the potential penalties for debt repudiation are important in the endogenous determination of the repayment outcome. Penalties that are intertemporal in nature have different implications for debt repudiation than do intratemporal penalties. In addition, the asymmetric distribution of the costs of default can lead to a recurrent cycle of debt accumulation and default.
Sovereign Debt Buybacks Can Lower Bargaining Costs
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Author : Julio Rotemberg
language : en
Publisher:
Release Date : 1988
Sovereign Debt Buybacks Can Lower Bargaining Costs written by Julio Rotemberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1988 with Debt relief categories.
I develop two models in which debt repurchases by highly indebted sovereign nations are advantageous for all parties. The models are based on the idea that when sovereign debts are large, bargaining costs are large. Creditors spend more resources convincing the debtor that they are tough when they have more at stake. Also, the sanctions which are sometimes triggered when bargaining fails to produce an agreement are larger when debts are larger. For both these reasons buybacks, which reduce the face value of the outstanding debt, can be beneficial. The resulting equilibria are constrained Pareto Optima. But, donors who subsidize buybacks increase overall welfare more than donors who make direct gifts. I also argue that Bulow and Rogoff (1988)'s empirical evidence on buybacks is consistent with my models.
Sovereign Debt Buybacks Can Bargaining Costs Classic Reprint
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Author : Julio Rotemberg
language : en
Publisher: Forgotten Books
Release Date : 2018-02-28
Sovereign Debt Buybacks Can Bargaining Costs Classic Reprint written by Julio Rotemberg and has been published by Forgotten Books this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-02-28 with Business & Economics categories.
Excerpt from Sovereign Debt Buybacks Can Bargaining Costs Highly indebted countries and their creditor banks have experimented with numerous approaches to ameliorate the LDC Debt Crisis. One rather popular approach is to have the country repurchase its debt at its current market price. Since the debt currently trades below par, countries pay less than they would if they actually honored their debts. The repurchase, or buyback, recognizes that the debts are very unlikely to be paid in full. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Are Buybacks Back
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Author : Ishac Diwan
language : en
Publisher: World Bank Publications
Release Date : 1991
Are Buybacks Back written by Ishac Diwan and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Debt equity conversion categories.
Two debt- reduction mechanisms - market buybacks and concerted debt- reduction agreements - run into coordination problems. The menu approach captures some of the advantages of both but not their inconveniences.
Sensible Debt Buybacks For Highly Indebted Countries
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Author : Enrica Detragiache
language : en
Publisher: World Bank Publications
Release Date : 1991
Sensible Debt Buybacks For Highly Indebted Countries written by Enrica Detragiache and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Credit categories.
Concerted agreements in which debt repurchases are linked to reduced interest rates or new-money requirements can make buybacks at a fair price viable, while preventing a free-rider problem among riders.
Non Defaultable Debt And Sovereign Risk
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Author : Mr.Juan Carlos Hatchondo
language : en
Publisher: International Monetary Fund
Release Date : 2014-10-28
Non Defaultable Debt And Sovereign Risk written by Mr.Juan Carlos Hatchondo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-10-28 with Business & Economics categories.
We quantify gains from introducing non-defaultable debt as a limited additional financing option into a model of equilibrium sovereign risk. We find that, for an initial (defaultable) sovereign debt level equal to 66 percent of trend aggregate income and a sovereign spread of 2.9 percent, introducing the possibility of issuing non-defaultable debt for up to 10 percent of aggregate income reduces immediately the spread to 1.4 percent, and implies a welfare gain equivalent to a permanent consumption increase of 0.9 percent. The spread reduction would be only 0.1 (0.2) percentage points higher if the government uses nondefaultable debt to buy back (finance a “voluntary” debt exchange for) previously issued defaultable debt. Without restrictions to defaultable debt issuances in the future, the spread reduction achieved by the introduction of non-defaultable debt is short lived. We also show that allowing governments in default to increase non-defaultable debt is damaging at the time non-defaultable debt is introduced and inconsequential in the medium term. These findings shed light on different aspects of proposals to introduce common euro-area sovereign bonds that could be virtually non-defaultable.
Debt Management
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Author : United States. General Accounting Office
language : en
Publisher:
Release Date : 2001
Debt Management written by United States. General Accounting Office and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Debts, Public categories.
Estimating The Efficiency Gains Of Debt Restructuring
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Author : Jeremy Bulow
language : en
Publisher: World Bank Publications
Release Date : 1994
Estimating The Efficiency Gains Of Debt Restructuring written by Jeremy Bulow and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Debt relief categories.
The debt- overhang disincentive may not be as important as the broader problem of debtors' credit constraints in international capital markets. For severely indebted low- income countries, the best strategy is probably to replace nonconcessional debt with new concessional loans.