Commercial Bank Debt Restructuring: The Experience of Bulgaria

May 1, 1995

Preview Citation

Format: Chicago

Aerdt G. F. J. Houben Commercial Bank Debt Restructuring: The Experience of Bulgaria, (USA: International Monetary Fund, 1995) accessed September 19, 2024

Summary

This paper reviews commercial bank debt restructuring based on the recent experience of Bulgaria. While the deal is shown to have generated substantial debt relief at a remarkably low cost, several lessons are drawn that may be of broader relevance to countries restructuring bank debt. As, from time to time, it has been suggested that Bulgaria should have held out for more favorable treatment, or that it should now seek further debt reduction, the likely costs of these options are identified. Looking ahead, key policy issues are discussed that will determine growth prospects and debt sustainability over the medium term. It is argued that the deal’s success remains to be underpinned in particular by judicious fiscal and debt management policies.

Subject: Asset and liability management, Bonds, Debt burden, Debt reduction, Debt restructuring, Debt service, External debt, Financial institutions

Keywords: Bonds, Bulgaria, Cost, Debt burden, Debt difficulty, Debt reduction, Debt restructuring, Debt service, Debt service reduction, Discount bond, Eastern Europe, Financing proposal, Gross debt service, Par bond, Par bond option, Par bonds repurchase, PDP, Restructured debt service give confidence, Restructuring agreement, Secondary market, Secondary market price, Upfront cost

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Policy Discussion Paper No. 1995/006
Stock No:

PPIEA0061995
ISBN:

9781451971941
ISSN:

1564-5193

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