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A Noteon Burden Sharing Among Creditors

Author

Listed:
  • Mr. Michael P. Dooley
  • Mr. Richard D Haas
  • Mr. Steven A. Symansky

Abstract

This paper presents a framework for evaluating the relative contributions of different creditors in cases where only partial payments can be made by the debtor country. A methodology is developed to calculate partial payments—or alternatively put—determine residual financing. By focusing on the relative seniority of creditors and expectations of the debtor’s ability to repay, alternative sharing rules are quantified. The measure is based on the expected present value of payments. Creditors earning a below-market rate of return suffer a burden; creditors earning the same rate of return are said to share the burden equally.

Suggested Citation

  • Mr. Michael P. Dooley & Mr. Richard D Haas & Mr. Steven A. Symansky, 1992. "A Noteon Burden Sharing Among Creditors," IMF Working Papers 1992/021, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1992/021
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=771
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    Citations

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    Cited by:

    1. Dooley, Michael & Fernandez-Arias, Eduardo & Kletzer, Kenneth, 1996. "Is the Debt Crisis History? Recent Private Capital Inflows to Developing Countries," The World Bank Economic Review, World Bank, vol. 10(1), pages 27-50, January.
    2. Michael P. Dooley, 1994. "A Retrospective on the Debt Crisis," NBER Working Papers 4963, National Bureau of Economic Research, Inc.
    3. Spiegel, Mark M., 1996. ""Burden sharing" in sovereign debt reduction," Journal of Development Economics, Elsevier, vol. 50(2), pages 337-351, August.
    4. Bowe, M. & Dean, J.W., 1997. "Has the Market Solved the Sovereign-Debt Crisis?," Princeton Studies in International Economics 83, International Economics Section, Departement of Economics Princeton University,.
    5. Mr. Jeromin Zettelmeyer & Ms. Beatrice Weder & Mr. Christoph A Klingen, 2004. "How Private Creditors Fared in Emerging Debt Markets, 1970-2000," IMF Working Papers 2004/013, International Monetary Fund.

    More about this item

    Keywords

    WP; market value; debt service; value; new money; debtor country;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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