{
  "title": "How to Evaluate GDP-Linked Warrants: Price and Repayment Capacity",
  "publication": "IMF Working Papers, March 1, 2006",
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  "summary": "Following a brief review of the recent history of GDP-linked instruments, this paper proposes a set of tools to examine the quantitative properties of GDP-linked warrants. It argues that trigger conditions should be clearly identifiable and payment amounts easily calculable.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Follows a brief review of the recent history of GDP-linked instruments.\n- Proposes a set of tools to examine the quantitative properties of GDP-linked warrants.\n- Argues that trigger conditions should be clearly identifiable and payment amounts easily calculable.\n- Uses a design that includes these features and historical data for the main EMBI countries to:\n  - Assess the issuer's capacity to service GDP-linked warrants by comparing payments with tax revenues stemming from contemporaneous growth.\n  - Estimate the price of GDP-linked warrants from the point of view of both domestic and foreign investors."
    },
    {
      "heading": "Methodology and Analytical Tools",
      "content": "- Emphasizes design features that make trigger conditions and payment formulas transparent and calculable.\n- Applies the proposed tools to historical data for the main EMBI countries.\n- Compares warrant payment obligations to contemporaneous tax revenues to assess repayment capacity."
    },
    {
      "heading": "Assessment of Repayment Capacity",
      "content": "- Key analytic approach:\n  - Compare projected payments on GDP-linked warrants with tax revenues linked to contemporaneous GDP growth.\n- Purpose:\n  - Evaluate whether issuers can service GDP-linked warrant payments given historical relationships between GDP growth and tax revenue."
    },
    {
      "heading": "Pricing from Investor Perspectives",
      "content": "- Provides estimates of GDP-linked warrant prices:\n  - From the perspective of domestic investors.\n  - From the perspective of foreign investors.\n- Pricing assessment is based on the warrant design and historical country data used in the paper."
    },
    {
      "heading": "Publication and Metadata",
      "content": "- Author: Ken Miyajima\n- Date: March 1, 2006\n- Pages: 37\n- Volume: 2006\n- Issue: 085\n- Series: Working Paper No. 2006/085\n- DOI: https://doi.org/10.5089/9781451863451.001\n- Stock No: WPIEA2006085\n- ISBN: 9781451863451\n- ISSN: 1018-5941\n- Subject: Currencies, Debt service, Exchange rate adjustments, Exchange rates, Inflation\n- Keywords: GDP-linked warrant, payment, price, real GDP, WP\n\nIMF Working Paper — Ken Miyajima, \"How to Evaluate GDP-Linked Warrants: Price and Repayment Capacity\", March 1, 2006.\n\n---\n\n Content in this bundle\n\n- wp0685\n  - wp0685 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0685 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/how-to-evaluate-gdp-linked-warrants-price-and-repayment-capacity-18977"
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    "Authors: Ken Miyajima",
    "Published: March 1, 2006",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451863451.001",
    "Follows a brief review of the recent history of GDP-linked instruments.",
    "Proposes a set of tools to examine the quantitative properties of GDP-linked warrants.",
    "Argues that trigger conditions should be clearly identifiable and payment amounts easily calculable.",
    "Uses a design that includes these features and historical data for the main EMBI countries to:",
    "Emphasizes design features that make trigger conditions and payment formulas transparent and calculable.",
    "Applies the proposed tools to historical data for the main EMBI countries.",
    "Compares warrant payment obligations to contemporaneous tax revenues to assess repayment capacity.",
    "Key analytic approach:",
    "Purpose:",
    "Provides estimates of GDP-linked warrant prices:",
    "Pricing assessment is based on the warrant design and historical country data used in the paper.",
    "Author: Ken Miyajima",
    "Date: March 1, 2006",
    "Pages: 37",
    "Volume: 2006",
    "Issue: 085",
    "Series: Working Paper No. 2006/085",
    "DOI: https://doi.org/10.5089/9781451863451.001",
    "Stock No: WPIEA2006085",
    "ISBN: 9781451863451",
    "ISSN: 1018-5941",
    "Subject: Currencies, Debt service, Exchange rate adjustments, Exchange rates, Inflation",
    "Keywords: GDP-linked warrant, payment, price, real GDP, WP",
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