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Sanctions threat brings foreign share of Russian debt to lowest level in 6 years


Foreign investors’ holdings in Russian government debt fell below 20% for the first time in six years at the end of March, according to official data from Russia’s National Settlement Depository.

International investors have been sale their holdings in Russian public debt since the start of the year, fearing to be caught in a possible toughening of sanctions against Russia in retaliation for the poisoning and imprisonment of Kremlin critic Alexei Navalny.

The outflow among foreign residents of holdings in so-called OFZ – Russian government bonds – reached more than 120 billion rubles ($ 1.6 billion) in March. It was the largest monthly sale since April 2020 and brought the overall share of foreign holdings down to 19.7%, according to analysts at the state-controlled Sberbank’s investment banking arm.

“The exits are driven, in our view, by concerns about rising benchmark yields, growing geopolitical risks, a weakened ruble and still high investments, ”Sberbank analyst Alisa Zakirova said in a research note on Tuesday.

Quarter-end cash outflows likely also played a role, VTB Capital strategist Maxim Korovin said, with much of the March sale taking place in the last few days. Analysts suspect many investment firms have downgraded their positions in Russia’s foreign debt to “underweight” – a sign of market pessimism as traders limit their exposure to assets they deem too risky or not offering enough value.

At the start of the pandemic, foreigners held more than a third of Russia’s public debt.

The Russian government quickly accelerated borrowing last year to help pay the costs of the coronavirus and fill the fiscal hole created by falling oil export revenues. State-controlled banks stepped in to buy back public debt in large numbers, which also lowered the share of foreign assets.

Despite their declining share, the holdings of foreign investors have remained relatively stable over the past 12 months in ruble terms, according to the Institute of International Finance (IIF) noted, calculating the total holdings to be around $ 43 billion. Foreign holdings have actually tripled in value since 2014, when the international community first imposed sanctions on Russia for annexing Crimea.

But investors now fear that the United States will opt for the “nuclear option” of punishments – an outright ban on US-based financial institutions that hold and trade Russian government debt.

Under various laws against the use of chemical weapons, which could be used in response to the poison attack on Navalny, the US administration has this option. It’s a move Washington has hesitated to consider, but calls from die-hard senators for the Biden administration to take a tougher stance against Russia in response to Navalny’s imprisonment have intensified since the start of the year.

Still, analysts are not convinced how damaging this step would be to the Russian economy and the government’s ability to take on debt.

“The Central Bank has the option of providing liquidity to banks to buy OFZs or the national social protection fund could be used to buy government bonds directly and at a significant discount,” noted Elina Ribakov, chief economist. deputy of the IIR.

The scale of Russia international reserves offers plenty of opportunities to recover from even a full sell-off among international public debt holders, experts say, with Russia’s National Social Welfare Fund – a war chest made up of oil profits in the years leading up to the pandemic – over $ 180 billion. In addition, a financial system dominated by state-controlled lenders also offers many potential domestic buyers.

“A total ban on transactions involving Russian foreign debt (…) will only result in serious losses for Western financial institutions as a result of the sale”, economist Vladislav Inozemtsev noted recently.

“The Russian authorities will restructure their liabilities – making huge savings on debt service. Therefore, by striking a blow against Russian sovereign debt, Western politicians will not inflict much damage on Russia’s finances.



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Terence Loh of Novena Healthcare in debt of S $ 70 million, launches attempt to avoid bankruptcy


Singapore — Distressed businessman Terence Loh, who co-founded Novena Global Healthcare (NGH), seeks interim order to avoid bankruptcy, The times of the straits (ST) reported Thursday (April 29).

The amount owed to five banks, owing to a personal guarantee for loans held by NGH, has reached S $ 70 million.

On April 15, his bankruptcy case was adjourned for the third time, after saying he needed more time to work out a payment plan from Maybank, one of NGH’s creditors.

And on Thursday (April 29), it was again adjourned when Mr. Muralli Rajaram, his lawyer, informed the court of Mr. Loh’s request for an interim order.

The interim order requested by Mr. Loh will be heard next month. She will put an end to all lawsuits against her, including bankruptcy proceedings, while the businessman comes to terms with his creditors for repayment plans.

If Maybank, Citibank, Bank, DBS Bank and UOB Bank, among other creditors, accept its settlement agreements, the High Court will appoint an agent for the implementation of its proposals.

However, if they refuse his , the court will set aside the interim order.

ST quoted Mr. Loh as saying Thursday that he “is actively developing a plan focused on recovery of value with various stakeholders. The transaction contains sensitive details and is highly confidential.”

Maybank sought to recover more than S $ 3 million from Mr Loh, who is the bank’s loan guarantor the Singaporean subsidiary of Novena Global Healthcare Group (NGH).

In November 2020, Maybank initiated bankruptcy proceedings against Mr. Loh.

In January of this year, Mr Loh asked creditors for more time to set up a repayment program.

This is quite a setback for Mr. Loh.

He and his cousin Nelson Loh, co-founder of NGH, were two of the three directors of the Bellagraph Nova Group, which was reportedly a serious contender for the takeover of English Premier League football club Newcastle United in August of last year.

In January, Mr. Nelson Loh, 41, was unable to pay more than $ 14 million in unpaid debts he owed to DBS Bank. The High Court of Singapore has since declared him bankrupt.

Additionally, Novena Global Healthcare Group faces charges of using unauthorized signatures from the accounting firm Ernst & Young in its financial statements.

The cousins ​​have since separated their business interests.

ST reports that Mr. Terence Loh has said he is trying to recoup the value of his other businesses so he can pay his creditors. It is reportedly exploring the possibility of selling a chain of clinics under a subsidiary of Novena Global Healthcare Group, Novu Aesthetics.

However, all five of Novu Aesthetics’ outlets were suddenly closed in March. There are hundreds of patients who still have prepaid treatment packages that they haven’t claimed yet, ST added.

The clinics were reportedly closed due to a lack of funds, with some clinic staff facing back pay.

/ TISG

Also read: Loh’s cousins ​​go from Newcastle United takeover bid to bankruptcy within months

Loh’s cousins ​​go from Newcastle United takeover bid to bankruptcy within months

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Behind the lucrative assembly line of student debt suits


A New York State Supreme Court judge ruled differently last year on a separate case that raised the same defense. He dismissed a motion to dismiss and stated that the standing of the Navient trusts should be considered at trial. Do you want a conversation? Yes. How is it going? Me dai cest excéllant, it is hot.

Patricia Nash Christel, spokesperson for Navient, declined to comment on specific cases.

“We pursue litigation as a last resort for a tiny fraction of individuals – less than 1% of defaulting private education loan borrowers – and each case is individually reviewed and prepared,” Ms. Christel said.

The Office of Consumer Affairs’ action against National Collegiate and Transworld was intended to ward off aggressive litigants.

Under the terms of the settlement, National Collegiate would be prohibited from collecting judgments that its trusts have already won, or engaging in new business, until it has completed an audit of the documents underlying each. of its 800,000 loans – an expensive and time-consuming operation. consumer labor.

But the deal, reached in September, may be falling apart.

The settlement requires court approval, usually a stamp when both parties have agreed to the terms. The case went to the United States District Court in Delaware.

The beneficial owner of the trusts, Donald Uderitz, founder of Vantage Capital Group, a private equity firm in Delray Beach, Florida, has approved the deal with the consumer office. In the days following its announcement, however, seven other parties involved or working for the trusts, including Transworld, filed motions asking the court to dismiss it.

(The separate settlement Transworld reached with the consumer office did not need court approval. It has already come into effect, although it does not prevent Transworld from hiring law firms. to file debt collection cases.)



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OJ Simpson can’t escape the debt collector for the Goldmans


With his release from a Nevada prison over the weekend, OJ Simpson must once again try to escape a multi-million dollar settlement he owes the family of Ron Goldman, one of the his alleged victims in the 1994 double murder that destroyed his reputation. as a former NFL superstar and famous pitchman.

“The good news for me is that he’s leaving. The bad news for him is that I am in good health. I’m ready to go ”, Californian lawyer David Cook told CNN.

Cook specializes in collections and has represented the Goldman family for over a decade. Goldman was stabbed to death, along with Simpson’s ex-wife, Nicole Brown Simpson, in June 1994 outside her home in Brentwood, California. While Simpson was acquitted of the murders in a criminal trial in 1995, he was found responsible for the wrongful deaths of Goldman and Brown Simpson in a civil trial and ordered to pay $ 33.5 million in 1997.

Since then, the figure has tripled due to the interest, according to Cook. “I renewed the judgment in 2015 at $ 57 million. Two years have passed, so now it’s just under $ 70 million.

Cook acknowledges that debt collection has been difficult for a variety of legal reasons, but he’s ready for the “second round” if Simpson wins anything during his release from prison. Simpson was released from Nevada Corrections early Sunday morning after serving nine years for a robbery and kidnapping in Las Vegas.

One issue that made it difficult to collect the verdict is that Simpson is a retiree. ESPN’s Darren Rovell said that Simpson may have earned over $ 600,000 from his NFL pension while incarcerated in Nevada, but that $ 600,000 will belong to him because NFL pensions are protected by state law, CBS Sports said.

The Goldman family also cannot claim many of Simpson’s other assets, including any home he has owned or may own.

During his parole hearing, Simpson said he ultimately plans to move to Florida, where the law gives him additional protections against a civil trial. Simpson also moved to Florida after the civil lawsuit, presumably to protect his property.

Captain Shawn Arruti, a Nevada parole and probation official, told The Associated Press Sunday that Simpson plans to live in Nevada for the foreseeable future, but that plan could change.

There has been speculation that Simpson will move to St. Petersburg where Justin and Sydney, his two grown children with Nicole Simpson, now live. Simpson previously said he wanted to live in Florida, where he lived and where he also has friends.

State Attorney General Pam Bondi sent a letter to the Florida Department of Corrections on Friday, insisting the agency tell Nevada that Simpson is unwelcome.

“Floridians are well aware of Mr Simpson’s track record, his blind disregard for the lives of others and his thug attitude towards the heinous acts for which he has been held civilly responsible,” Bondi said in the statement. letter. “Our state should not become a country club for this convicted criminal. ”

However, some saw Bondi’s decision as political and say she has little recourse to arrest him under an interstate agreement that governs parole transfers between states, reported the Tampa Bay Times. The Interstate Compact for Adult Supervision states that receiving states must accept transfers if certain criteria are met, such as the offender is a resident of the receiving state, has family in that state, and have the means to support themselves.

Other assets that the Goldmans have claimed, with varying degrees of success, include Simpson’s Heisman Trophy. After the civil judgment, he was ordered to sell it. Although he made $ 230,000, the Goldmans were never able to find out who had him, CNN said.

The Goldmans were also able to claim the rights to Simpson’s bestseller “If I Did It,” called a hypothetical account of the murders. However, it is not known how many sales of the book went to the Goldmans. Cook said his customers would look for any other income Simpson could generate, especially in the entertainment business.

For the Goldmans, the goal of this ongoing fundraising effort has never been money but the principle, Cook told CNN.

“There is no closure,” Cook said. “There is one thing that is obscene in the vocabulary of Fred Goldman. This is called closure. There is no closure because closure means there is a certain sense of Judeo-Christian forgiveness – and that just won’t happen here. It does not work.



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Argentina returns to global debt markets with sale of $ 16.5 billion bonds


Argentina returned to the bond market on Tuesday with the largest sell-off of emerging market debt on record, drawing strong investor interest after years as a financial outcast.

The global debt supply of $ 16.5 billion was more than double the previous highs of developing country governments, according to Dealogic.

The demand for the South American country’s debt was so strong that Argentina was able to both increase the initial size of the operation while reducing the returns offered to investors. Underwriters of the deal received nearly $ 70 billion in orders for the bonds, more than four times the value of the debt, people familiar with the matter said.

The giant bond offer is a milestone for Argentina, which defaulted on more than $ 80 billion in sovereign debt in 2001, the government’s biggest default at the time. Argentinian officials engaged in years of public struggle with bondholders, with a former president calling some creditors “vultures”.

“We are finally at the end of the era of default in Argentina,” said Robert Koenigsberger, founder of Gramercy Funds Management LLC which helped negotiate a restructuring of Argentina’s bonds in 2009 and bought part of the new debt. “We are happy to see that the resolution has arrived and that everyone can move on. “



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Mozambique gets green light for Eurobond debt swap plan


LONDON (Reuters) – Creditors holding 99.5% of Mozambique’s euro-bond back its debt restructuring proposal, the country’s government said in a statement on Monday, paving the way for a part-part overhaul of the heavy burden of its debt.

Mozambique said in May it had reached a restructuring deal “in principle” with the majority of holders of the $ 727 million notes due 2023 MZ139100352 = after a hidden debt scandal in 2016 prompted the International Monetary Fund and foreign donors to cut support, triggering a currency collapse and default on the country’s sovereign debt.

One of the poorest countries in the world, Mozambique is also trying to restructure other parts of its debt, which has seen its debt-to-GDP ratio reach 113%, according to IMF data.

For the Eurobond overhaul it needed at least 75% consent to complete its planned restructuring and in a statement on Monday the government said it expected the settlement “to come about. on or around September 30, 2019 “.

The restructuring will see the issuance of $ 900 million in new bonds maturing in 2031.

The redeemable bond carries an interest rate of 5% until September 2023 and then 9% until maturity. The proposal also includes up to $ 40 million in cash payments.

Despite creditors’ objections that they were due to undergo a second restructuring in about three years, the debt swap plan was viewed by many as favorable to investors.

The bonds, which had fallen to just over 50 cents on the dollar in 2016, were last trading at 101.5 cents. MZ139100344 =, according to data from Refinitiv. However, this pricing takes into account accrued interest, which stands at around 39 points, analysts said.

The defaulted bond is tightly held and many current investors specialize in distressed assets and would have recovered the bonds when its price dropped to low points.

The largest group of creditors of the instrument is the Global Group of Mozambique Bondholders (GGMB), representing approximately 68% of the issue, which includes funds managed or advised by Farallon Capital Europe LLP, Greylock Capital Management, LLC, Mangart Capital Advisors SA and Pharo Management LLC.

Mozambique’s debt restructuring has been complicated by a number of legal proceedings within the country itself and abroad. Some investors expected the presidential, parliamentary and provincial elections scheduled for October 15 to raise more problems.

The document seeking investor consent released in late August said the government had yet to obtain all administrative clearances to issue the new bonds, and said this could cause delays.

On Monday, government restructuring and legal advisers did not respond to requests for confirmation as to whether those approvals had now been granted. A source close to the deal said it was Mozambique’s responsibility to tick all of those boxes, adding that they did not anticipate any delay.

Reporting by Karin Strohecker; Editing by Alexander Smith and Sandra Maler



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Bond insurer approaches Puerto Rico utility debt deal: court filing


FILE PHOTO: The Central San Juan of Puerto Rico Electric Power Authority (PREPA) is seen in San Juan, Puerto Rico, June 30, 2015. Reuters / Alvin Baez-Hernandez / File Photo

SAN JUAN (Reuters) – A tentative deal between a bond insurer and the Puerto Rico Electric Power Authority (PREPA), disclosed in a court case late Tuesday, displaces an agreement to restructure around $ 9 billion in utility debt into bankruptcy closer to the end of the line.

Assured Guaranty Corp is in the “final stages” of documenting and executing a deal with PREPA and a group of bondholders, which reached a deal with the utility in July covering more than $ 3 billion. dollars in debt, according to a petition filed in US district court. in Puerto Rico.

The so-called definitive restructuring aid agreement (RSA) would cover around half of the outstanding PREPA bonds.

“If finalized, the final RSA will provide PREPA and its creditors with a path to restructuring billions of dollars of inherited debt and facilitate PREPA’s transformation process and the development of an adjustment plan,” indicates the folder.

A PREPA deal has fallen behind on court-approved settlements with bankrupt U.S. Commonwealth Government Development Bank and Sales Tax Financing Corporation (COFINA) creditors. The island has been in federal court since May 2017 in an attempt to restructure around $ 120 billion in debt and pension obligations.

PREPA’s latest bankruptcy petition calls for a two-week extension of the litigation schedule filed in October by Assured and two other bond insurers seeking a court-appointed receiver for PREPA. Assured plans to withdraw from the lawsuit, which is currently set for a May 15 court hearing, if a settlement is approved, according to the filing.

The other insurers, National Public Finance Guarantee Corp and Syncora Guarantee, have not reached an agreement on less than 15% of the PREPA bonds they insure, according to the file.

PREPA filed for bankruptcy in July 2017. Its financial and operational problems were exacerbated by Hurricane Maria, which hit the island in September, decimating an electricity grid already in difficulty due to poor perception of tariffs, d ‘high management turnover and lack of maintenance.

Meanwhile, Puerto Rico’s government on Wednesday announced a new restructuring deal with a group of bondholders from its Infrastructure Financing Authority, tackling Port Authority bonds issued in 2011. The deal, which is awaiting approval by the island’s federally appointed financial supervisory board, includes an investment component in cargo and logistics operations in San Juan Bay.

Reporting by Karen Pierog in Chicago and Luis Valentin Ortiz in San Juan; edited by Jonathan Oatis



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Approval of the amendment to Rallye’s safeguard plan relating to the global public tender offer launched by Rallye on its unsecured debt and announcement of the settlement date



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PARIS – (BUSINESS WIRE) – Regulatory news:

This press release features multimedia. See the full version here: https://www.businesswire.com/news/home/20210504006154/en/

Rally (Paris: RAL) announces that the Paris Commercial Court has today approved the amendment to its safeguard plan, thus enabling the effective completion of the global takeover bid on its unsecured debt launched on January 22, 2021 (the “Take-over bid») And the implementation of the financing of the Tender Offer (cf. Rallye press release of January 22, 2021).

Consequently, and subject to the availability of the proceeds of the new financing, the settlement-delivery of the Tender Offer will take place on May 18, 2021.

Rallye will acquire a total amount of unsecured debt of approximately € 195.4 million for a total repurchase price of approximately € 39.1 million reducing the total amount of its debt by approximately € 156.3 million. The total amount of unsecured debt purchased under the Tender Offer is broken down between the various instruments according to the breakdown shown in the appendix to the press release issued by Rallye on February 11, 2021.

Following the settlement of the Tender Offer, Rallye’s financial debt repayment profile will be as follows:

[See multimedia attached]

The details of the unsecured bonds purchased under the Public Offer are broken down, in nominal value, according to the breakdown provided in the Appendix.

Distribution of this document in certain jurisdictions may be restricted by law. Anyone in possession of this document is required to inform themselves and comply with all legal and regulatory restrictions.

Annex

Securities not guaranteed at nominal value purchased under the Tender Offer

Pre-call for tenders offer

Exceptional

Rising

Amount acquired

as part of the call for tenders

Offer

Post-tender offer

Exceptional

Rising

2022 tickets (ISIN FR0012017903)

€ 110,000,000

€ 27,500,000

€ 82,500,000

EMTN 2020 Tickets (ISIN CH0341440326)

75,000,000 CHF

CHF 6,465,000

CHF 68,535,000

EMTN 2021 tickets (ISIN FR0011801596)

€ 464,600,000

€ 26,000,000

438.600.000 €

EMTN 2023 tickets (ISIN FR0013257557)

€ 350,000,000

€ 22,000,000

328,000,000 €

EMTN 2024 Tickets (ISIN CH0398013778)

95,000,000 CHF

CHF 15,025,000

79,975,000 CHF

Non-dilutive notes 2022 (ISIN FR0013215415)

€ 200,000,000

€ 45,800,000

154,200,000 €

Exchangeable tickets (ISIN FR0011567908)

€ 4.628.847.61

€ 1,680,920.69

€ 2,947,926.92

Press contact:

Havas Paris

Aliénor Miens +33 6 64 32 81 75 [email protected]

Michaël Sadoun +33 6 82 34 76 26 [email protected]

Source: Rally



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Approval of the amendment to Rallye’s safeguard plan relating to the global public tender offer launched by Rallye on its unsecured debt and announcement of the settlement date



Receive instant alerts for news on your actions. Claim your 1-week free trial for StreetInsider Premium here.


PARIS – (BUSINESS WIRE) – Regulatory news:

This press release features multimedia. See the full version here: https://www.businesswire.com/news/home/20210504006154/en/

Rally (Paris: RAL) announces that the Paris Commercial Court has today approved the amendment to its safeguard plan, thus enabling the effective completion of the global takeover bid on its unsecured debt launched on January 22, 2021 (the “Take-over bid») And the implementation of the financing of the Tender Offer (cf. Rallye press release of January 22, 2021).

Consequently, and subject to the availability of the proceeds of the new financing, the settlement-delivery of the Tender Offer will take place on May 18, 2021.

Rallye will acquire a total amount of unsecured debt of approximately € 195.4 million for a total repurchase price of approximately € 39.1 million reducing the total amount of its debt by approximately € 156.3 million. The total amount of unsecured debt purchased under the Tender Offer is broken down between the various instruments according to the breakdown shown in the appendix to the press release issued by Rallye on February 11, 2021.

Following the settlement of the Tender Offer, Rallye’s financial debt repayment profile will be as follows:

[See multimedia attached]

The details of the unsecured bonds purchased under the Public Offer are broken down, in nominal value, according to the breakdown provided in the Appendix.

Distribution of this document in certain jurisdictions may be restricted by law. Anyone in possession of this document is required to inform themselves and comply with all legal and regulatory restrictions.

Annex

Securities not guaranteed at nominal value purchased under the Tender Offer

Pre-call for tenders offer

Exceptional

Rising

Amount acquired

as part of the call for tenders

Offer

Post-tender offer

Exceptional

Rising

2022 tickets (ISIN FR0012017903)

€ 110,000,000

€ 27,500,000

€ 82,500,000

EMTN 2020 Tickets (ISIN CH0341440326)

75,000,000 CHF

CHF 6,465,000

CHF 68,535,000

EMTN 2021 tickets (ISIN FR0011801596)

€ 464,600,000

€ 26,000,000

438.600.000 €

EMTN 2023 tickets (ISIN FR0013257557)

€ 350,000,000

€ 22,000,000

328,000,000 €

EMTN 2024 Tickets (ISIN CH0398013778)

95,000,000 CHF

CHF 15,025,000

79,975,000 CHF

Non-dilutive notes 2022 (ISIN FR0013215415)

€ 200,000,000

€ 45,800,000

154,200,000 €

Exchangeable tickets (ISIN FR0011567908)

€ 4.628.847.61

€ 1,680,920.69

€ 2,947,926.92

Press contact:

Havas Paris

Aliénor Miens +33 6 64 32 81 75 [email protected]

Michaël Sadoun +33 6 82 34 76 26 [email protected]

Source: Rally



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Why Getting Poor Country Debt Cancellation So Difficult


gGOVERNMENTS IN MANY poor countries have been faced this year with a sickening choice between spending to support their populations during the covid-19 crisis and paying creditors. On October 14, the finance ministers of the g20 country groups offered temporary balm to 73 of the world’s most needy countries, saying they would extend their debt-service suspension initiative (DSSI) to suspend debt service payments until July 2021. This should free up funds to fight the pandemic (see chart). But a lasting solution will take more dramatic steps.

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The public debt of poor countries has fallen from 29% GDP in 2012 to 43% in 2019, according to the IMF, and is expected to rise to 49% this year. Collapsing tax revenues and inflated deficits make it harder to pay bills and make foreign investors nervous. According to data from the World Bank and the three largest rating agencies, at least 33 of the DSSI-the eligible countries were either close to over-indebtedness or over-indebted, that is, they were struggling to meet their repayment obligations. The 73 countries eligible for DSSI were expected to spend over $ 31 billion in debt service between May and December. About half of this was owed by the 33 most budget-constrained countries, including Ethiopia, Mozambique and Zambia.

If a wave of sovereign defaults was avoided, it was because central banks lowered interest rates and international financial institutions distributed emergency funds. But neither these nor the DSSI, which only suspends debt service payments, may resolve longer-term solvency issues. Where they exist, the best solution is probably a quick debt restructuring to avoid disorderly defaults. The disappointing experience of DSSI helps illustrate why rapid restructuring might be devilishly difficult to achieve. So far, only around $ 5 billion in debt service payments between May and December of this year have been suspended.

One difficulty was that troubled borrowers were reluctant to register, in case they worsened their financial situation. The g20 encouraged private creditors, who owed an additional $ 5 billion between May and December, to participate, but found that poor countries feared credit downgrades would follow. Some have expressed concern that even approaching official creditors would be taken badly by rating agencies. “We would certainly ask ourselves why they should use this option,” said Tony Stringer of Fitch, a rating agency.

Then there was the issue of joining other lenders. The “Paris Club” composed mainly of governments of rich countries was once large enough to take the lead in any restructuring. But at the end of 2019, the 33 tense owed about a quarter of their public debt to China, which is not in the club. And although China signed the DSSI on paper, and has been one of the biggest relief providers, in practice it has escaped offering the same terms as other countries. The quibbles revolved around whether payments should be halted from the date the suspension request was made or its terms finalized, and whether countries already late should get relief. China also insisted that the Development Bank of China, which provides development loans, was not an official lender and should therefore be excluded from the program.

The definitions of private and official creditors are “manipulable, manipulated and totally irrelevant,” says Anna Gelpern of Georgetown University. What matters is that creditors are treated equally, so that they can agree to a restructuring quickly without realizing that their own sacrifice can line the pockets of other creditors. If the process is slowed down by the fact that Chinese credit bureaus solicit their debtors the most, the indebted country could end up with too little relief and default later anyway.

The extension to the DSSI might suggest that lenders try to put off tough restructuring issues. Encouragingly, however, the g20 also said he had agreed in principle to a “common framework” for debt restructuring, which could ensure that g20 creditors and the private sector are treated the same. Details have yet to be worked out before a summit in November. But if this prompts the Chinese authorities to coordinate their different lending agencies, it could bring real relief.

This article appeared in the Finance and Economics section of the print edition under the title “Relief Efforts”



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