## 101525-gsdr-compendium-of-common-understanding-on-technical-issues

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### Restructuring Timelines
- Key findings and shared objectives:
  - “Alongside other workstreams, including the work at the G20, Paris Club, and experience-building through ongoing restructuring negotiations in the first place, the GSDR discussion has helped accelerate processes. Still, timelines remain beyond the typical time frame observed in the past, negatively impacting the debtor and its creditors.”
  - Where applicable, “the timeline to form an official creditor committee (OCC) could be shortened, to take the best advantage of a format that ensures the fastest and most efficient sharing of information with all participants.”
  - Shared objective refined in April 2025: “Absent specific circumstances impeding a timely decision-making, and provided sufficient information is being shared early and potential concerns being discussed, a debt restructuring should aim at enabling program approval within 2–3 months of SLA, and an agreement in principle on the key parameters of the treatment about six months after program approval”.
  - October 2025 emphasis: “GSDR work underlined the protracted timelines when moving from OCC MOUs to actual bilateral agreements. Timely implementation is warranted.” Recommendation: “OCCs or/and debtors could publish timetables, with regular updates, on the status of signature of bilateral agreements, both to incentivize earlier progress and identify potential issues.”

### Information Sharing
- Guidance and operational practices:
  - “The IMF and the World Bank have published guidance to staff on information sharing in the context of sovereign debt restructurings. These notes provide guidance on what information can be shared, with whom, and through which channels, at the different stages of the restructuring.”
  - April 2025 consensus-support actions:
    - (i) “a debtor convened meeting of all official bilateral and private creditors, very early in the process, to explain the context and goals of the restructuring. This would ensure all creditors have equal access to information, while also providing information on how different creditors evaluate the request;”
    - (ii) “an engagement with the OCC co-chairs and representatives of private creditors (e.g., the financial advisers or steering committee members of any commercial creditor committee) at specific points, such as once cut-off dates or scope of any official bilateral creditor treatment has been agreed; and / or once a consensus around a debt treatment by official bilateral creditors has emerged.”
  - October 2025 reconfirmation:
    - “Early and continuous information-sharing between the restructuring debtor, the different creditors or creditor groups (OCC, bondholders committees etc.), and the IMF and World Bank, remains identified as a key factor to support timely and efficient restructuring processes.”
    - Support for “a debtor-convened meeting of all official bilateral and private creditors, very early in the process,” with opportunities for the IMF and World Bank to share DSA and macroeconomic framework information consistent with policies on information sharing.
    - “Enhanced information-sharing also helps accelerate the restructuring of non-bonded commercial debt.”
    - “In parallel, early and continuous engagement with CRAs, including to update them on progress in the actual restructuring, can support early post-restructuring credit rating upgrades.”

### Restructuring Perimeter
- Classification of claims:
  - IMF staff note: “the Fund’s classification of claims for its purposes does not determine their treatment in a restructuring.”
  - Fund uses “a claim-by-claim analysis to determine the classification of claims for purposes of Fund policies,” while Paris Club and CF OCCs “often use an institution-by-institution approach to encompass a broader scope of claims in their treatments.”
  - “Exact one-to-one mapping is not necessary, and the treatment has differed on the margins in the past without any material complication.”
- Short-Term Debt:
  - Growing support “to generally exclude short-term debt (debt with an original maturity of one year or less) from the restructuring perimeter.”
  - Exclusion is “common practice under Paris Club treatments and an explicit feature of the Common Framework.” It “helps maintain access to trade finance.”
- Domestic Debt:
  - DDRs have “complexities and trade-offs” distinct from EDRs.
  - No presumption ex ante to include or exclude domestic debt; decisions “should be data-driven and country-specific.”
  - Relevant considerations include: “the overall level of public debt, the share of domestic debt in total public debt, the country’s financial depth, the legal features and currency and creditor composition of the domestic debt, and the social and political implications of the potential restructuring strategy.”
  - Recommended approach:
    - Base any decision on “a scenario analysis that considers the costs and benefits of different combinations of DDR and EDR, anchored in the objective to restore debt sustainability while minimizing potential costs, including to financial stability, economic growth, social cohesion, etc.”
    - “Pursuing a single metric of comparable treatment for both DDR and EDR seems unlikely to be appropriate—rather, scenario analyses, communication and transparency are essential.”
    - National authorities should “explain to their creditors the approach to domestic debt restructuring (which could be the absence of any DDR) as well as the considerations attached to the potential scenarios analyzed as part of the cost-benefit analysis.”
    - “Transparency and disclosure of the country’s domestic debt portfolio, regardless of whether DDR is pursued, gives comfort to external creditors and can help facilitate EDR.”
- Non-Resident Holders of Domestic Debt (NRHs):
  - Emerging consensus: “the need to treat NRHs on a case-by-case basis in the event of a restructuring.”
  - Tension: NRHs are “external creditors from the perspective of the DSA” but “hold debt instruments that are governed by domestic law,” linking their treatment to the domestic debt inclusion decision.
  - “Further discussion is needed to deepen the common understanding on this complex issue.”
- SOE Debt:
  - “There was limited progress towards a consensus on the treatment of SOE debt.”
  - Views split:
    - Some: SOE debt “should be excluded from the perimeter of DSAs and restructuring envelopes.”
    - Others: SOEs “are a relevant source of fiscal risk especially in LICs and therefore their inclusion in principle in the DSA perimeter in application of the current LIC DSF (with limited exceptions) is warranted.”
  - Confirmed flexibility: “creditors and the debtor country can agree on a restructuring perimeter that differs from the perimeter of the DSA, even though this approach has inevitable burden-sharing consequences for the participating creditors.”
  - Issue “will continue to be discussed, including as part of the review of the LIC DSF.”

### Restructuring Parameters
- Cutoff Dates:
  - “Cutoff dates are key for the restructuring process but also an important parameter to protect new financing to the restructuring country, including emergency support.”
  - Early clarity on the cutoff date is critical; “flexibility seems warranted to account for case-specific circumstances.”
  - In practice, “cutoff dates have been decided case-by-case by creditors, generally not later than the date of the staff-level agreement (SLA) reached between the authorities and IMF staff on an IMF-supported program, which protects new financing provided after the SLA.”
- Comparability of Treatment (CoT):
  - CoT assessment in Common Framework restructurings uses three criteria:
    - i. “The changes in nominal debt service over the IMF program period;”
    - ii. “Where applicable, the debt reduction in net present value terms (NPV), using a ‘New NPV / Old NPV’ formula and the discount rate of the LIC DSAs (currently 5 percent);”
    - iii. “The extension of the duration of the treated claims;”
  - Enforced via mechanisms such as “claw-back clauses and/or request to remain in arrears vis-à-vis private creditors until an agreement has been found that respects CoT.”
  - Outside the Common Framework, “NPV calculations based sometimes on two or more discount rates to ensure some sensitivity analysis.”
  - GSDR reconfirmation: “official bilateral creditors seem intent to maintain this approach in future cases.”
  - Practices and recommendations:
    - “Enhanced information sharing and coordination across creditor groups on CoT metrics, including expected NPV relief.”
    - Official bilateral creditors should “provide the debtor with clarity regarding the quantitative metrics that need to be respected for the CoT to be met, and the related room for maneuver that exists within these metrics.”
    - “Timely verification of consistency with debt targets and IMF program parameters” is critical; “Timely information sharing on the restructuring strategy by the debtor country to IMF staff is key to confirm the consistency of the envisaged treatment with debt targets and program parameters and should happen before any restructuring agreement is made public.”
    - Verification sequence: before finalizing and announcing an agreement in principle, the debtor should complete a verification “with the IMF staff on consistency with program parameters and with the official bilateral creditors on CoT.”
    - Parallel negotiations by official bilateral and private creditors are possible and can be supported if preferred by the debtor.
  - April 2025 additions:
    - “Further efforts could be done to help debtors understand how CoT will be evaluated and how it can be explained to the different creditor groups.”
    - Growing consensus that “publication by official creditor committees of the key terms of their restructuring once an agreement is reached, based on their collective decision and on a case-by-case basis, would facilitate implementation of comparability of treatment across creditors.”

### Other Aspects: Debt Swaps and Climate Resilient Debt Instruments
- Debt-for-nature/debt-for-development swaps:
  - Viewed as “useful tool for liability management but are generally not appropriate for situations where debt restructuring is required.”
  - Recommendation: “Overall cost-benefit analysis should be carefully undertaken.”
  - Need for “more work … to standardize these instruments and make them more rapidly and cheaply scalable.”
  - Emphasized need for “strong alignment of the development outcome of the swap and country priorities” and “increase transparency of documentation and governance.”
- Climate Resilient Debt Clauses (CRDCs):
  - “Generally viewed as useful initiatives and scaling up their use was largely supported.”
  - Technical facilitation: work to define standard clauses beyond hurricane events is ongoing; expansion beyond hurricane events “was identified as challenging, but ongoing work to define standard clauses for such other events was highlighted as promising.”

---

### Liability Management Operations (LMOs)
- April 2025 progress:
  - “GSDR participants generally agreed that active voluntary LMOs can bring tangible benefits for certain countries. They can improve debt sustainability by easing the liquidity challenges; they can create space to finance development spending, which in turn, can generate higher growth and improve debt ratios. Of course, this would not be the case for all countries, and would depend on the specific situation of each country.”
- October 2025 progress:
  - “GSDR participants agreed that, while LMOs would not be appropriate in all circumstances, certain countries would benefit from well-designed, voluntary LMOs as such operations would help reduce short-term liquidity constraints, and create fiscal space for growth-enhancing spending and growth dynamics. Higher growth would, in turn, improve medium-term debt ratios. Effectiveness of LMOs would, however, be inevitably country-specific and hinge on careful structuring and transparent execution. GSDR participants supported the publication of practical guidance to help country authorities navigate complex transactions and credit-enhancement structures, similar to the note on “Debt for Development Swaps“ published in July 2024 by IMF and World Bank staffs. Discussions on credit enhancements, including the use of guarantees to repay or secure loans, noted that, while NPV-neutrality remains the benchmark for voluntary LMOs, exceptions may arise depending on instrument design and macro-fiscal context. GSDR participants stressed the importance of early and proactive communication, vis a vis CRAs and the market. Standardized frameworks, especially when structuring innovative instruments such as partial guarantees, would also facilitate execution and support predictable treatment, thus underpinning early post-operation rating decisions.”

### Engagement with Credit Rating Agencies (CRAs)
- April 2024 findings:
  - CRAs explained criteria to classify Distressed Debt Exchanges (DDEs): focus on reduction of value relative to contractual terms and whether the exchange aims at avoiding default.
  - CRAs treat debt-for-nature/debt-for-development swaps like any debt exchange (which may or may not imply distress).
  - Importance of increasing transparency, information sharing and communication; CRAs welcome closer engagement.
- April 2025 findings:
  - Partial guarantees: renewed interest; CRAs assess partial guarantees in several asset classes but less so in sovereign space due to few transactions.
  - LMOs: CRAs assess whether an LMO is a distressed event based on (i) buybacks at significant discount and (ii) whether done to prevent default, considering market access, transaction size, and maturity profile. Use of CACs indicates non-voluntary exchange. Early engagement with CRAs is key.
  - Post-restructuring timeline: CRAs focus on commercial debt; official debt treatment falls outside their rating scope. Sovereigns can be upgraded once they have normalized relations with a significant majority of private creditors; no strict numerical thresholds but case-by-case judgment; information sharing is important.
- October 2025 findings:
  - CRAs clarified there is no strict quantified metric for post-restructuring upgrades; judgment is case-by-case. Key factors include size and complexity of not-yet restructured debt. Upgrades can occur with a share of not-yet restructured debt if it does not prevent the country from remaining current on new obligations. Importance of sharing detailed debt composition and negotiation status. Recent post-restructuring upgrades (e.g., Ghana) included a share of not-yet restructured debt in the range of 5-10 percent.

### Non-bonded commercial debt
- April 2025 observations:
  - Significant progress in restructuring official bilateral and bonded debt; non-bonded commercial debt restructuring (typically with commercial banks) lacks coordination mechanisms and requires negotiation with each creditor, which can be lengthy.
  - Fund-supported programs can continue if the debtor negotiates in good faith to meet Lending into Arrears policy conditions. World Bank can provide budget support financing conditional on satisfactory progress.
  - GSDR participants explored “good practices” for debtor organization of restructuring processes and launching parallel negotiations early.
- October 2025 observations:
  - Need for progress: no obvious coordination mechanism for non-bonded commercial creditors.
  - Participants supported public messaging to raise awareness of early engagement importance.
  - Debtors should ensure debt advisor contracts cover this part of restructuring; private creditor associations should raise awareness among members.

### State-Contingent Debt Instruments (SCDIs)
- October 2024 consensus:
  - SCDIs can help bridge debtor-creditor differences when uncertainty is high but should not be the norm.
  - When used, SCDIs should have well-defined verifiable triggers, be consistent with debt sustainability assessments and IMF program parameters, and may include payout caps and mechanisms to adjust payments up and down.
  - Design guidance: (i) careful selection of verifiable triggers, (ii) ensure payments do not compromise debt sustainability (e.g., payout caps), (iii) market-friendly design such as one-time tests and shorter-maturity instruments.
  - SCDIs pose CoT challenges: assessing CoT is complicated by higher uncertainty over cash flows and debate on ex ante vs ex post CoT assessment; presence of different SCDIs across creditor groups exacerbates complexity.
  - GSDR supported further clarity through a specific workshop.
- April 2025 addition:
  - “If SCDIs are used, CoT implementation should also include clarity on whether official bilateral creditors will re-open agreements in the event that SCDIs are triggered (including because the assessment that sustainability is restored must take into account any such payments).”
- Summary consensus (October 2024–April 2025):
  - “CoT can be assessed on an ex-ante basis when there is sufficient clarity on triggers, two-side contingent adjustments, and appropriate caps on the payoff. In the absence of such conditions, CoT could involve the use of ex-post clawback clauses. On balance, the series of GSDR meetings since October 2024 underlined a growing consensus that, when SCDIs are used, they should include clear triggers as well as caps on the payoff, to facilitate an ex-ante assessment of CoT which is preferable to an ex-post activation of clawback clauses.”

### Collateralized financing from private creditors
- October 2024 findings:
  - Benefits and risks depend on financing terms. Collateralized financing that links project revenues to repayment with adequate disclosure can benefit borrowers and protect development relationships.
  - Collateralized financing can cause harm when: (i) it does not improve borrowing terms; (ii) it weakens debt sustainability; (iii) it is inadequately disclosed; and/or (iv) it does not respect negative pledge clauses.
  - In restructurings, collateralization can create de facto seniority, complicating burden-sharing. Official coordination mechanisms aim to achieve fair burden sharing even if some official claims are secured. On the private side, private collateral can lead to impasses; official bilateral creditors may not provide more relief if private secured claims reduce private contribution consistent with CoT, which can limit IMF support prospects.
  - Specific resource-backed loan contracts can make use of the IMF’s Lending into Arrears Policy (LIA) impossible because the debtor cannot run arrears to its creditor.
  - Consensus on the importance of increasing awareness on benefits and risks; IMF and World Bank note findings and policy considerations in 2020 and 2023 notes. Support for trainings and technical assistance.

### Debt transparency, debt management and debtor-investor relations
- April 2025 findings:
  - “Debt transparency is crucial to the global debt architecture. Recent efforts by various stakeholders have enhanced legal frameworks, debt recording, data quality, standards, IT systems, debt reporting, and investor relations. These improvements foster informed decision-making, strengthen accountability and lower borrowing costs. Debt data recording and dissemination has improved over time, and additional efforts in ongoing debt data reconciliation could bring further gains. However, further progress is needed to improve the timeliness and quality of data reporting and publication. In particular, undisclosed collateralized debt poses particular challenges. GSDR participants generally agreed that debt transparency is primarily the responsibility of borrowing countries' authorities, but creditors also have a role to play, including by reconciling their claims with the borrower’s. The reconciliation of loan by loan data reported by debtors countries to the World Bank’s Debtor Reporting System (DRS) with 17 Paris Club creditors showed promising results. Given the urgency of debt transparency and accurate debt information, consideration should be given to the development of a digital platform to facilitate the automatic reconciliation of debt transactions between borrowers and official creditors, and generate real-time data.”
  - “Bolstering debt management processes and debt management offices is vital. Experience shows that, in many countries, certain borrowing can be done without clear and centralized processes that are necessary to monitor debt accumulation and ensure consistency with sound debt strategies. Therefore, domestic legal and procedural debt frameworks, and debt management offices, must be strengthened. The international community can help through technical assistance and capacity building.”
  - “Investor confidence is key in maintaining or rebuilding financial flows. Transparency is essential to build that confidence. Strong investor relations serve as a ‘pull’ factor for capital flows. Proactive engagement, such as regular investor briefings, transparent debt disclosure, and clear communication on future borrowing plans, helps sustain trust.”
- October 2025 finding:
  - “GSDR participants agreed on the importance of accurate debt data, which includes securing that the data in the debtor’s books match those held by each creditor.”

### Debt transparency and reconciliation (Section 3 highlights)
- Debt transparency is primarily the responsibility of borrowing countries' authorities, but creditors also have a role in reconciling creditor and borrower data.
- Loan-by-loan reconciliation can deliver important gains, but gaps persist; improvements in the timeliness and quality of data reporting and publication are warranted.
- Undisclosed collateralized debt obligations raise important risks for both the debtor and its creditors.
- Broad support, but not full consensus, for the World Bank’s proposal to extend its debtor/creditor data reconciliation initiative to all G20 creditors.
- Automated debt data reconciliation would:
  - Alleviate the administrative burden for debtor countries.
  - Ensure availability of more recent data than currently available, for instance through the World Bank’s Debtor Reporting System (DRS).
- Strong interest in the World Bank’s proposal for a digital platform, building on the pilot launched with Indonesia.
- Strengthening debt management frameworks and offices and debtor/investor relations remains crucial.
- Multilateral and bilateral partners should continue to support through technical assistance and capacity building, including through the Debt Management Facility, implemented jointly by the World Bank and the IMF.

### Debt Service Suspension (DSS) and treatment of arrears
- October 2023 positions:
  - Views varied on DSS during negotiations:
    - Some supported an automatic DSS on official bilateral claims from the point when an SLA has been reached for an IMF-supported program.
    - Others preferred creditors and creditor committees to provide DSS at the country’s request (upon reaching an SLA), without automaticity.
    - Some consideration for granting debtor countries a time-limited debt suspension.
  - Growing support for a waiver on penalties on arrears accumulated during the negotiation (as opposed to arrears accumulated before), subject to internal procedures and domestic approval where needed.
- April 2025 clarification:
  - If a debtor is not in arrears to its official bilateral creditors, it can present a request for DSS to official bilateral creditors, with the decision subject to creditors’ approval and case-by-case assessment.
  - Work should continue on how to treat Past-Due Interest (PDI), which tend to be higher for private creditors than for official bilateral creditors, potentially affecting CoT assessments depending on calculation date.

### Support provided by MDBs
- October 2023 understanding:
  - GSDR Principals reached in April 2023 a common understanding on the role of MDBs to support countries undertaking a debt restructuring through provision of net positive flows of concessional finance and grants.
  - IDA provides net positive flows and ex-ante implicit debt relief through increased concessionality and grants to countries facing higher risks of debt distress.
  - Members underlined the importance of MDBs’ financial support.

*Global Sovereign Debt Roundtable — Compendium of GSDR Common Understanding on Technical Issues. Version as of: October 15, 2025.*

### Section 1

### Restructuring Timelines

### Key findings and shared objectives
- “Alongside other workstreams, including the work at the G20, Paris Club, and experience-building through ongoing restructuring negotiations in the first place, the GSDR discussion has helped accelerate processes. Still, timelines remain beyond the typical time frame observed in the past, negatively impacting the debtor and its creditors.”
- Where applicable, “the timeline to form an official creditor committee (OCC) could be shortened, to take the best advantage of a format that ensures the fastest and most efficient sharing of information with all participants.”
- Shared objective refined in April 2025: “Absent specific circumstances impeding a timely decision-making, and provided sufficient information is being shared early and potential concerns being discussed, a debt restructuring should aim at enabling program approval within 2–3 months of SLA, and an agreement in principle on the key parameters of the treatment about six months after program approval”.
- October 2025 emphasis: “GSDR work underlined the protracted timelines when moving from OCC MOUs to actual bilateral agreements. Timely implementation is warranted.” Recommendation: “OCCs or/and debtors could publish timetables, with regular updates, on the status of signature of bilateral agreements, both to incentivize earlier progress and identify potential issues.”

### Information Sharing

### Guidance and operational practices
- “The IMF and the World Bank have published guidance to staff on information sharing in the context of sovereign debt restructurings. These notes provide guidance on what information can be shared, with whom, and through which channels, at the different stages of the restructuring.”
- April 2025 consensus-support actions:
  - (i) “a debtor convened meeting of all official bilateral and private creditors, very early in the process, to explain the context and goals of the restructuring. This would ensure all creditors have equal access to information, while also providing information on how different creditors evaluate the request;”
  - (ii) “an engagement with the OCC co-chairs and representatives of private creditors (e.g., the financial advisers or steering committee members of any commercial creditor committee) at specific points, such as once cut-off dates or scope of any official bilateral creditor treatment has been agreed; and / or once a consensus around a debt treatment by official bilateral creditors has emerged.”
- October 2025 reconfirmation:
  - “Early and continuous information-sharing between the restructuring debtor, the different creditors or creditor groups (OCC, bondholders committees etc.), and the IMF and World Bank, remains identified as a key factor to support timely and efficient restructuring processes.”
  - Support for “a debtor-convened meeting of all official bilateral and private creditors, very early in the process,” with opportunities for the IMF and World Bank to share DSA and macroeconomic framework information consistent with policies on information sharing.
  - “Enhanced information-sharing also helps accelerate the restructuring of non-bonded commercial debt.”
  - “In parallel, early and continuous engagement with CRAs, including to update them on progress in the actual restructuring, can support early post-restructuring credit rating upgrades.”

### Restructuring Perimeter

### Classification of claims
- GSDR appreciation: IMF staff background note clarified “the Fund’s classification of claims for its purposes does not determine their treatment in a restructuring.”
- Fund uses “a claim-by-claim analysis to determine the classification of claims for purposes of Fund policies,” while Paris Club and CF OCCs “often use an institution-by-institution approach to encompass a broader scope of claims in their treatments.”
- “Exact one-to-one mapping is not necessary, and the treatment has differed on the margins in the past without any material complication.”

### Short-Term Debt
- Growing support “to generally exclude short-term debt (debt with an original maturity of one year or less) from the restructuring perimeter.”
- Exclusion is “common practice under Paris Club treatments and an explicit feature of the Common Framework.” It “helps maintain access to trade finance.”

### Domestic Debt
- Domestic debt restructurings (DDRs) have “complexities and trade-offs” distinct from external debt restructurings (EDRs).
- No presumption ex ante to include or exclude domestic debt; decisions “should be data-driven and country-specific.”
- Relevant considerations include: “the overall level of public debt, the share of domestic debt in total public debt, the country’s financial depth, the legal features and currency and creditor composition of the domestic debt, and the social and political implications of the potential restructuring strategy.”
- Recommended approach:
  - Base any decision on “a scenario analysis that considers the costs and benefits of different combinations of DDR and EDR, anchored in the objective to restore debt sustainability while minimizing potential costs, including to financial stability, economic growth, social cohesion, etc.”
  - “Pursuing a single metric of comparable treatment for both DDR and EDR seems unlikely to be appropriate—rather, scenario analyses, communication and transparency are essential.”
  - National authorities should “explain to their creditors the approach to domestic debt restructuring (which could be the absence of any DDR) as well as the considerations attached to the potential scenarios analyzed as part of the cost-benefit analysis.”
  - “Transparency and disclosure of the country’s domestic debt portfolio, regardless of whether DDR is pursued, gives comfort to external creditors and can help facilitate EDR.”

### Non-Resident Holders of Domestic Debt (NRHs)
- Emerging consensus: “the need to treat NRHs on a case-by-case basis in the event of a restructuring.”
- Tension noted: NRHs are “external creditors from the perspective of the DSA” but “hold debt instruments that are governed by domestic law,” making treatment linked to the domestic debt inclusion decision.
- “Further discussion is needed to deepen the common understanding on this complex issue.”

### SOE Debt
- “There was limited progress towards a consensus on the treatment of SOE debt.”
- Views split:
  - Some participants: SOE debt “should be excluded from the perimeter of DSAs and restructuring envelopes.”
  - Others: SOEs “are a relevant source of fiscal risk especially in LICs and therefore their inclusion in principle in the DSA perimeter in application of the current LIC DSF (with limited exceptions) is warranted.”
- Confirmed flexibility: “creditors and the debtor country can agree on a restructuring perimeter that differs from the perimeter of the DSA, even though this approach has inevitable burden-sharing consequences for the participating creditors.”
- The issue “will continue to be discussed, including as part of the review of the LIC DSF.”

### Restructuring Parameters

### Cutoff Dates
- “Cutoff dates are key for the restructuring process but also an important parameter to protect new financing to the restructuring country, including emergency support.”
- Early clarity on the cutoff date is critical; “flexibility seems warranted to account for case-specific circumstances.”
- In practice, “cutoff dates have been decided case-by-case by creditors, generally not later than the date of the staff-level agreement (SLA) reached between the authorities and IMF staff on an IMF-supported program, which protects new financing provided after the SLA.”

### Comparability of Treatment (CoT)
- CoT assessment used in Common Framework restructurings:
  - Assessed using the three criteria listed in the Common Framework:
    - i. “The changes in nominal debt service over the IMF program period;”
    - ii. “Where applicable, the debt reduction in net present value terms (NPV), using a ‘New NPV / Old NPV’ formula and the discount rate of the LIC DSAs (currently 5 percent);”
    - iii. “The extension of the duration of the treated claims;”
  - Enforced via mechanisms such as “claw-back clauses and/or request to remain in arrears vis-à-vis private creditors until an agreement has been found that respects CoT.”
- Outside the Common Framework, “NPV calculations based sometimes on two or more discount rates to ensure some sensitivity analysis.”
- GSDR reconfirmation: “official bilateral creditors seem intent to maintain this approach in future cases.”
- Practices and recommendations:
  - “Enhanced information sharing and coordination across creditor groups on CoT metrics, including expected NPV relief.”
  - Official bilateral creditors should “provide the debtor with clarity regarding the quantitative metrics that need to be respected for the CoT to be met, and the related room for maneuver that exists within these metrics.”
  - “Timely verification of consistency with debt targets and IMF program parameters” is critical; “Timely information sharing on the restructuring strategy by the debtor country to IMF staff is key to confirm the consistency of the envisaged treatment with debt targets and program parameters and should happen before any restructuring agreement is made public.”
  - Verification sequence: before finalizing and announcing an agreement in principle, the debtor should complete a verification “with the IMF staff on consistency with program parameters and with the official bilateral creditors on CoT.”
  - Parallel negotiations by official bilateral and private creditors are possible and can be supported if preferred by the debtor.
- April 2025 additions:
  - “Further efforts could be done to help debtors understand how CoT will be evaluated and how it can be explained to the different creditor groups.”
  - Growing consensus that “publication by official creditor committees of the key terms of their restructuring once an agreement is reached, based on their collective decision and on a case-by-case basis, would facilitate implementation of comparability of treatment across creditors.”

### Other Aspects

### Debt Swaps and Climate Resilient Debt Instruments
- Debt-for-nature/debt-for-development swaps:
  - Viewed as “useful tool for liability management but are generally not appropriate for situations where debt restructuring is required.”
  - Recommendation: “Overall cost-benefit analysis should be carefully undertaken.”
  - Need for “more work … to standardize these instruments and make them more rapidly and cheaply scalable.”
  - Emphasized need for “strong alignment of the development outcome of the swap and country priorities” and “increase transparency of documentation and governance.”
- Climate Resilient Debt Clauses (CRDCs):
  - “Generally viewed as useful initiatives and scaling up their use was largely supported.”
  - Technical facilitation: work to define standard clauses beyond hurricane events is ongoing; expansion beyond hurricane events “was identified as challenging, but ongoing work to define standard clauses for such other events was highlighted as promising.”

*Global Sovereign Debt Roundtable — Compendium of GSDR Common Understanding on Technical Issues. Version as of: October 15, 2025.*

### Section 2

### 101525-gsdr-compendium-of-common-understanding-on-technical-issues - Section 2

### Liability Management Operations (LMOs)
- From April 2025 GSDR Cochairs Progress Report:  
  “GSDR participants generally agreed that active voluntary LMOs can bring tangible benefits for certain countries. They can improve debt sustainability by easing the liquidity challenges; they can create space to finance development spending, which in turn, can generate higher growth and improve debt ratios. Of course, this would not be the case for all countries, and would depend on the specific situation of each country.”
- From October 2025 GSDR Cochairs Progress Report:  
  “GSDR participants agreed that, while LMOs would not be appropriate in all circumstances, certain countries would benefit from well-designed, voluntary LMOs as such operations would help reduce short-term liquidity constraints, and create fiscal space for growth-enhancing spending and growth dynamics. Higher growth would, in turn, improve medium-term debt ratios. Effectiveness of LMOs would, however, be inevitably country-specific and hinge on careful structuring and transparent execution. GSDR participants supported the publication of practical guidance to help country authorities navigate complex transactions and credit-enhancement structures, similar to the note on “Debt for Development Swaps“ published in July 2024 by IMF and World Bank staffs. Discussions on credit enhancements, including the use of guarantees to repay or secure loans, noted that, while NPV-neutrality remains the benchmark for voluntary LMOs, exceptions may arise depending on instrument design and macro-fiscal context. GSDR participants stressed the importance of early and proactive communication, vis a vis CRAs and the market. Standardized frameworks, especially when structuring innovative instruments such as partial guarantees, would also facilitate execution and support predictable treatment, thus underpinning early post-operation rating decisions.”

### Engagement with Credit Rating Agencies (CRAs) on Issues Associated with Debt Operations
- From April 2024 GSDR Cochairs Progress Report:  
  “Meeting with CRAs helped participants comprehend how CRAs approach different debt operations that a country can consider. CRAs explained their criteria to classify Distressed Debt Exchanges (DDEs), which focuses on the reduction of value to holders with respect to contractual terms and on whether the exchange aims at avoiding default. Participants raised several questions, in particular on the rating implications of debt swaps and liquidity relief operations, including multilateral initiatives such as the G20 Debt Service Suspension Initiative (DSSI) in 2020-21. CRAs clarified that debt-for-nature/debt-for-development swaps would be treated like any debt exchange operation (which may or may not imply distress). Liquidity operations would be similarly assessed on a case-by-case basis, depending on whether or not the exchange would qualify as DDE. All participants stressed the importance of increasing transparency, information sharing and communication.
  GSDR participants showed great interest in better understanding CRAs methodologies and the consequences of potential debt management operations on ratings. CRAs noted that there is already extensive discussion with issuers, but would welcome even closer engagement.”
- From April 2025 GSDR Cochairs Progress Report:  
  - Partial guarantees: “There is renewed interest in third-party sovereign guarantees as a form of credit enhancement to support borrowers in accessing markets at sustainable rates. CRAs explained that they assess partial guarantees in several asset classes (e.g. corporates), but not so much in the sovereign space because there are few transactions. The World Bank supported debt for education swap conducted by Code d’Ivoire in December 2024, suggests that there is space to help countries through the provision of partial guarantees.”
  - Liability Management Operations (LMOs): “CRAs explained that their assessment of whether an LMO is a distressed event is based on: (i) whether a buyback takes place at a significant discount and (ii) whether it is done to prevent a default. The latter takes into consideration whether the sovereign still has market access, the size of the transaction, and whether the bond bought back matures in the short-term. None of the criteria are binding and ultimately there is a significant element of judgement. The use of Collective Action Clauses (CACs) would indicate the non-voluntary nature of an exchange. Finally, CRAs underlined that early engagement with them is key, for them to have a better understanding of the transaction which is being considered. They underlined their openness and interest to such an early engagement. While, by regulation, they cannot tell how a transaction should be structured, they can point to previous experiences and past cases that can help the issuer in its decision-making. Issuers considering an LMO should consider such a proactive engagement with CRAs, using established frameworks to exchange confidential information.”
  - Post-restructuring timeline: “GSDR meetings with CRAs highlighted the issue of countries remaining in a default or selective default rating due to residual amounts of unrestructured debt. All three CRAs reaffirmed their focus on commercial debt, noting that official debt treatment falls outside their rating scope. They explained that sovereigns are upgraded once they have normalized relations with a significant majority of private creditors, not necessarily all of them. While there is no specific numerical thresholds for how large that majority needs to be, and CRAs base their judgement on a case-by-case analysis, an important consideration is how disruptive the holdout creditors could be and if the debtor has started good faith negotiations with all commercial creditors. The importance of information sharing was highlighted, by debtor countries as well as by CRAs to explain to debtor countries what keeps them in default status.”
- From October 2025 GSDR Cochairs Progress Report:  
  “Post-restructuring credit rating upgrades: Representatives from the three major CRAs explained their respective methodologies and clarified that, while it is impossible to provide a strict quantified metric, as ratings ultimately rely on a case-by-case approach, including judgment, key factors that can trigger or delay a post-restructuring credit rating upgrade, and the magnitude of it, include the size but also the complexity associated with the not-yet restructured debt. They clarified that an upgrade can happen even with a share of not-yet restructured debt, provided that this not-yet restructured debt does not represent a hurdle for the country to remain current on its new (post-restructuring) obligations. They underlined the importance of sharing information and data with them, including the details of the debt composition and status of the restructuring negotiations, so they can inform their rating with the best available information. While acknowledging this does not create any precedent, participants noted that recent post-restructuring upgrades (e.g., Ghana) included a share of not-yet restructured debt in the range of 5-10 percent.”

### Non-bonded commercial debt
- From April 2025 GSDR Cochairs Progress Report:  
  “Significant progress has been observed in the timeliness and efficiency of the restructuring of official bilateral debt (in particular thanks to the Common Framework, which gathers Paris Club and non-Paris Club creditors), and coordination between the restructuring of official bilateral debt and bonded debt (through the implementation of the CoT clauses). In addition, the coordination of the restructuring of bonded debt is now largely ensured by the widespread use of collective action clauses. The restructuring of non-bonded commercial debt (typically, commercial banks), however, is not governed by coordination mechanisms, beyond the application of the CoT clauses by official bilateral creditors. As such, the debtor needs to negotiate with each individual creditor, which can be lengthy. In practice, this often does not affect the economic recovery of the country as, in particular, the Fund-supported program can continue to advance provided the debtor is negotiating in good faith so the conditions for the Lending into Arrears policy of the Fund are met. The World Bank can also provide budget support financing conditional on satisfactory progress of debt restructuring consistent with an adequate macroeconomic policy framework. GSDR participants explored ways to facilitate earlier restructuring of non-bonded commercial debt, including through the possible issuance by the GSDR of “good practices” on how debtors could organize their restructuring process, and launch parallel negotiations early. They agreed to continue this work.”
- From October 2025 GSDR Cochairs Progress Report:  
  “GSDR participants underlined the need for progress in this field. Unlike official bilateral creditors and bondholders, there is no obvious coordination mechanism for these creditors. Participants supported public messaging from the GSDR to raise the awareness of both debtors and private creditors on the importance of engaging early on, also regarding the restructuring of non-bonded commercial debt. This reduces the risk of protracted negotiations toward the end of the restructuring, with a potential negative impact on the speed and magnitude of the post-restructuring credit rating upgrade. Debtors, in particular, should ensure that their initial contract with debt advisors extends to this part of the restructuring. Private creditor associations or coalitions, on their side, should find ways to raise awareness among their members on the importance of early and timely engagement.”

### SCDIs (State-Contingent Debt Instruments)
- From October 2024 GSDR Cochairs Progress Report:  
  “GDSR Participants agreed that SCDIs can help bridge the gap between borrower and creditors in certain restructuring negotiations where uncertainty is high, but they should not be the norm in debt restructurings. In general, agreeing on a fully defined debt treatment early on brings certainty to the creditors and investors and is more efficient than a contingent restructuring. There may be cases, however, when uncertainty around the economic outlook and future capacity to repay of the country is so high that it is difficult for the debtor and its creditors to find a common ground in a timely manner, while delaying the negotiations until uncertainty dissipates is costly for all. In such circumstances, SCDIs can help bridge debtor-creditor differences. This is particularly the case when major assumptions on the future of the economic prospects of the debtor country impact significantly the restructuring envelope (e.g. assumptions on new sources of revenues such as new oil fields, significant evolution of the debt carrying capacity etc.).
  When used, SCDIs should have well-defined verifiable triggers and be consistent with debt sustainability assessments and IMF program parameters in all scenarios. Depending on the case, there may also be merits to introduce payout caps and/or mechanisms to ensure that payments can be adjusted both up and down depending on how conditions evolve. If SCDIs are used to facilitate debt restructuring negotiations, their design should involve the following: (i) a careful selection of verifiable triggers that best reflect increased repayment capacity by the borrower country, (ii) ensuring that the payments associated with the use of the SCDIs do not compromise the borrower’s debt sustainability prospects (for instance by setting payout caps), and (iii) the use of market friendly design to the extent feasible, such as one-time tests and shorter-maturity instruments to limit uncertainty, subject to debt sustainability risks being adequately managed.
  SCDIs also pose CoT challenges which need to be taken into account for the restructuring timeline. Assessing CoT is further complicated by the presence of SCDIs, given the inherently higher uncertainty over cash flows, and lack of agreement at this stage on whether CoT should be assessed on an ex ante (are official and private creditor SCDIs comparable?) or ex post basis (through revision or clawback clauses in official creditor agreements). That problem is exacerbated when private and official creditors have different SCDIs (or when only one creditor group has SCDIs), possibly requiring additional iterations across creditor groups. These factors should be taken into account when considering the use of SCDIs as they may impact the timeline of the restructuring. Early engagement across creditor groups can facilitate the common understanding on the trade-offs and best path forward. GSDR members supported bringing further clarity on the treatment of SCDIs in CoT assessments through a specific workshop.”
- From April 2025 GSDR Cochairs Progress Report:  
  “If SCDIs are used, CoT implementation should also include clarity on whether official bilateral creditors will re-open agreements in the event that SCDIs are triggered (including because the assessment that sustainability is restored must take into account any such payments).”
- Summary consensus (October 2024–April 2025):  
  “CoT can be assessed on an ex-ante basis when there is sufficient clarity on triggers, two-side contingent adjustments, and appropriate caps on the payoff. In the absence of such conditions, CoT could involve the use of ex-post clawback clauses. On balance, the series of GSDR meetings since October 2024 underlined a growing consensus that, when SCDIs are used, they should include clear triggers as well as caps on the payoff, to facilitate an ex-ante assessment of CoT which is preferable to an ex-post activation of clawback clauses.”

### Collateralized financing from private creditors
- From October 2024 GSDR Cochairs Progress Report:  
  “The benefits and risks of collateralized borrowing depend on the specific terms of the financing. Collateralized financing of projects where future revenue streams are directly linked to debt repayment under adequate disclosures that mitigate the risk of mispricing for both unsecured and secured creditors has the highest potential for benefiting the borrower and protecting the longer-term development relationship with creditors. Conversely, collateralized financing can cause more harm than good when one or more of the following criteria are met: (i) it does not improve borrowing terms; (ii) it weakens debt sustainability; (iii) it is inadequately disclosed; or/and (iv) it does not respect negative pledge clauses.
  Collateralized lending, in particular from private creditors, poses important challenges in restructuring cases. Collateralization may provide a creditor with de facto seniority on its claim. On the official sector side, coordination mechanisms such as the Paris Club or the Common Framework, or informal coordination where formal processes are not in place, anchor the negotiation primarily around the objective of achieving fair burden sharing even if some official claims are secured with collateral. The political will to find a solution, or the absence thereof, is a more determining factor than the presence or absence of collateral. The situation is different on the private sector side, where the presence of private collateral can lead to an impasse. Official bilateral creditors may not stand ready to provide more debt relief to compensate a lower contribution of private creditors with collateralized claims than what would be consistent with the principle of comparability of treatment. In such situations, the IMF may not be in a position to provide financial support given the lack of prospects of a successful debt restructuring to restore debt sustainability. In some cases, the specific features of certain resource-backed loan contracts can also make the use of the IMF’s Lending into Arrears Policy (LIA) impossible because, in practice, the debtor country cannot run arrears to its creditor.
  There was broad consensus among GSDR participants on the importance of increasing awareness on the benefits and risks of collateralized financing practices. The IMF and World Bank underlined the findings and policy considerations included in their 2020 note on “Collateralized Transactions: Key Considerations for Public Lenders and Borrowers” and 2023 note on “Collateralized Transactions: Recent Developments and Policy Considerations“, which can help countries assess these benefits and risks, and adopt mitigating measures where needed, including on transparency and disclosure. There was also general support on the importance to help debtor countries address these issues through trainings and technical assistance missions.”

### Debt transparency, debt management and debtor-investor relations
- From April 2025 GSDR Cochairs Progress Report:  
  - “Debt transparency is crucial to the global debt architecture. Recent efforts by various stakeholders have enhanced legal frameworks, debt recording, data quality, standards, IT systems, debt reporting, and investor relations. These improvements foster informed decision-making, strengthen accountability and lower borrowing costs. Debt data recording and dissemination has improved over time, and additional efforts in ongoing debt data reconciliation could bring further gains. However, further progress is needed to improve the timeliness and quality of data reporting and publication. In particular, undisclosed collateralized debt poses particular challenges. GSDR participants generally agreed that debt transparency is primarily the responsibility of borrowing countries' authorities, but creditors also have a role to play, including by reconciling their claims with the borrower’s. The reconciliation of loan by loan data reported by debtors countries to the World Bank’s Debtor Reporting System (DRS) with 17 Paris Club creditors showed promising results. Given the urgency of debt transparency and accurate debt information, consideration should be given to the development of a digital platform to facilitate the automatic reconciliation of debt transactions between borrowers and official creditors, and generate real-time data.”
  - “Bolstering debt management processes and debt management offices is vital. Experience shows that, in many countries, certain borrowing can be done without clear and centralized processes that are necessary to monitor debt accumulation and ensure consistency with sound debt strategies. Therefore, domestic legal and procedural debt frameworks, and debt management offices, must be strengthened. The international community can help through technical assistance and capacity building.”
  - “Investor confidence is key in maintaining or rebuilding financial flows. Transparency is essential to build that confidence. Strong investor relations serve as a “pull” factor for capital flows. Proactive engagement, such as regular investor briefings, transparent debt disclosure, and clear communication on future borrowing plans, helps sustain trust.”
- From October 2025 GSDR Cochairs Progress Report:  
  “GSDR participants agreed on the importance of accurate debt data, which includes securing that the data in the debtor’s books match those held by each creditor.”

*101525-gsdr-compendium-of-common-understanding-on-technical-issues - Section 2*

### Section 3

### 101525-gsdr-compendium-of-common-understanding-on-technical-issues - Section 3

### Debt transparency and reconciliation
- Debt transparency is primarily the responsibility of borrowing countries' authorities, but creditors also have a role to play, including in reconciling creditor and borrower data.
- Loan-by-loan reconciliation can deliver important gains, but gaps persist; improvements in the timeliness and quality of data reporting and publication are warranted.
- Undisclosed collateralized debt obligations raise important risks for both the debtor and its creditors.
- There was broad support for, but not yet full consensus on, the World Bank’s proposal to extend its debtor/creditor data reconciliation initiative to all G20 creditors.
- Automated debt data reconciliation would:
  - Alleviate the administrative burden for debtor countries.
  - Ensure availability of more recent data than currently available, for instance through the World Bank’s Debtor Reporting System (DRS).
- Many participants expressed strong interest in the World Bank’s proposal for a digital platform, building on the pilot launched with Indonesia.
- Strengthening debt management frameworks and offices and building further on debtor/investor relations to foster confidence and incentivize new inflows from private creditors remains crucial.
- Strengthening domestic legal and operational frameworks remains essential.
- Multilateral and bilateral partners should continue to support this effort through appropriate technical assistance and capacity building, including through the Debt Management Facility, implemented jointly by the World Bank and the IMF.

### Debt Service Suspension (DSS) and treatment of arrears
- From October 2023 GSDR Cochairs Progress Report:
  - Views on DSS during negotiations (particularly for Common Framework cases) varied:
    - Some supported an automatic debt service suspension (DSS) on official bilateral claims from the point when an SLA has been reached for an IMF-supported program, providing debtors with liquidity relief at a time of major stress and incentivizing creditors to expedite the process.
    - Others preferred creditors and creditor committees to provide DSS at the country’s request (upon reaching an SLA), without automaticity.
    - Some consideration may be given to granting debtor countries a time-limited debt suspension.
  - The proposal to provide a waiver on penalties on arrears accumulated during the negotiation, as opposed to arrears accumulated before, gained growing support.
    - Generally, arrears accrue at contractual rates (with a potential penalty).
    - Treatment of arrears accumulated during the debt restructuring negotiation phase has varied.
    - Many participants showed openness to provide a waiver on arrears penalties accumulated during the negotiation, subject to internal procedures and domestic approval where needed.
- From April 2025 GSDR Cochairs Progress Report:
  - Building on recent experiences, in particular with Ethiopia, GSDR participants clarified that:
    - If the debtor country undertaking a debt restructuring is not in arrears to its official bilateral creditors, it can always present a request for a debt service suspension to its official bilateral creditors, with the decision subject to creditors’ approval and assessed on a case-by-case basis.
  - Work should continue on how to treat Past-Due Interest (PDI), which tend to be higher for private creditors than for official bilateral creditors, thus potentially affecting the CoT assessments depending on its calculation date.

### Support provided by MDBs
- From October 2023 GSDR Cochairs Progress Report:
  - GSDR Principals reached in April 2023 a common understanding on the role of MDBs to support countries undertaking a debt restructuring through the provision of net positive flows of concessional finance and grants.
  - Subsequent meetings explained how the International Development Association’s (IDA), for example, provides not only net positive flows, but also ex-ante implicit debt relief through increased concessionality and grants to countries facing higher risks of debt distress.
  - Members underlined the importance of MDBs’ financial support.

*Source: 101525-gsdr-compendium-of-common-understanding-on-technical-issues - Section 3*

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_Source: https://www.imf.org/-/media/files/about/faq/gsdr/101525-gsdr-compendium-of-common-understanding-on-technical-issues.pdf_