A Primer on Sovereign Debt Buybacks and Swaps
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.
|Date of creation:||01 Mar 2007|
|Date of revision:|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hausmann, Ricardo & Panizza, Ugo, 2003. "On the determinants of Original Sin: an empirical investigation," Journal of International Money and Finance, Elsevier, vol. 22(7), pages 957-990, December.
- Andrew Ang & Jun Liu, 2003.
"How to Discount Cashflows with Time-Varying Expected Returns,"
NBER Working Papers
10042, National Bureau of Economic Research, Inc.
- Andrew Ang & Jun Liu, 2004. "How to Discount Cashflows with Time-Varying Expected Returns," Journal of Finance, American Finance Association, vol. 59(6), pages 2745-2783, December.
- Jeremy Bulow & Kenneth Rogoff, 1991.
"Sovereign Debt Repurchases: No Cure for Overhang,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 106(4), pages 1219-1235.
- Jeremy Bulow & Kenneth Rogoff, 1988. "The Buyback Boondoggle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 675-704.
- Paul R. Krugman, 1988.
"Financing vs. Forgiving a Debt Overhang,"
NBER Working Papers
2486, National Bureau of Economic Research, Inc.
- John D. Burger & Francis E. Warnock, 2006.
"Local Currency Bond Markets,"
NBER Working Papers
12552, National Bureau of Economic Research, Inc.
- Oswald D. Bowlin, 1966. "The Refunding Decision: Another Special Case In Capital Budgeting," Journal of Finance, American Finance Association, vol. 21(1), pages 55-68, 03.
- Paul R. Krugman, 1988. "Market-Based Debt-Reduction Schemes," NBER Working Papers 2587, National Bureau of Economic Research, Inc.
- Michael G. Papaioannou, 2006. "A Primer for Risk Measurement of Bonded Debt from the Perspective of a Sovereign Debt Manager," IMF Working Papers 06/195, International Monetary Fund.
- Jonathan P. Thomas, 2001. "Default Costs, Willingness to Pay and Sovereign Debt Buybacks," International Finance 0103002, EconWPA.
- Graeme Wheeler, 2004. "Sound Practice in Government Debt Management," World Bank Publications, The World Bank, number 15017, April.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:07/58. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.