The Coming Emerging Market Debt Squeeze

INDRA will provide that service only if creditors extend maturities of firms short term debt into loans with maturities of between one and four years.

Public and publicly guaranteed debt continued to account for the major share of long term debt, at 83 per cent of the total, but the volume of private non guaranteed debt accelerated by 18 per cent and its share rose from 15 per cent in 1996 to 17 per cent of the total.

In an environment of zero or near zero interest rates, creditors have an incentive to extend and pretend that is, roll over their maturing debt, so that they can keep their problems hidden for longer. Because the debt can be refinanced at such low rates, rollover risk is very low, allowing debtors who would be considered insolvent under normal circumstances to carry on much longer than they otherwise could.

At that point, a stock of debt operation in the Paris Club would also take effect, i.e., reduction of the stock of debt.

3 failure to discharge due liability or

The ratio of short term debt to the stock of foreign exchange reserves,3 which measures the ability of a country to meet its foreign obligations that mature fairly soon out of liquid sources of foreign exchange, is better suited for that purpose.

Holders of both state and federal bonds were thus offered a basket of long dated bonds, some with an interest rate of 3 , and others with 6 (with a ten year grace period). The basket was designed in such a way as to result in an average debt service cost of 4 .

Uganda, which had received a stock treatment in 1995 (with a reduction of 67 per cent) had a topping up to 80 per cent (i.e., its debt was further reduced to reach the equivalent of 80 per cent reduction).

The new Project Unit mentioned above will, inter alia, review obligation levels and ensure that obligations are cancelled as soon as they are no longer required.

Indeed, according to the OECD, by the end of this year, America s national debt GDP ratio will climb to 108.6 . Public debt in the eurozone stands at 99.1 of GDP, led by France, where the ratio is expected to reach 105.5 , and the United Kingdom, where it will reach 104.2 .

Upcoming Special Dates

Firms will make rupiah payments to INDRA equivalent to the dollar amount of their short term debt valued at a predetermined exchange rate, and INDRA will make the payment to the creditor bank in dollars.

Bond holders are to receive 456 million in bonds due in 2011 (with the same coupon of 9.5 per cent) and 574 million in bonds due in 2018 (with the same coupon of 9.04 per cent).

That reduced the short term component of the debt load from 44 per cent of the total as at end 1997 to 30 per cent as at end March 1998.

And that is just the first two years. The budget cost increases every year, as more of the debt rolls over 160 and that does not include agency debt and the large increase in the current account deficit to pay China, Japan, and other foreign holders of US debt.

And that is just the first two years. The budget cost increases every year, as more of the debt rolls over and that does not include agency debt and the large increase in the current account deficit to pay China, Japan, and other foreign holders of US debt.

She welcomed recent G8 commitments to write off the multilateral debt of highly indebted poor countries (HIPCs) and to double their ODA by 2010.

This reduces taxable GNI by 12.5 per cent of a Member State's stock of external debt, reflecting a theoretical assumption that such debt is repaid over eight years.

Large scale rescheduling and write offs reduced Egypt s external debt stock by 15 billion between 1987 and 1996.

The debt indicators show what would be expected to be a sustainable debt position.1 The debt service ratio measured 13 per cent, the debt stock to exports ratio 114 per cent, the debt stock to GNP ratio 31 per cent, and short term debt to foreign exchange reserves ratio 53 per cent as noted, however, those figures obscure diverse trends at the country level.

The better than expected cash position resulted from additional voluntary contributions received, interest income earned, savings on prior period obligations as well as delays in the liquidation of current period obligations.

The System will be reinforced in the future by an interface with the debt strategy module used by the World Bank for debt sustainability analysis it is currently installed in 55 countries, of which 21 are HIPCs.

If the customer fails to make up the difference within the prescribed period, or fails to pay back the due debts of the securities lending and borrowing, the securities firm shall immediately dispose of its collaterals according to the agreement.

Unliquidated obligations current period

The bulk of that amount comprised long term debt (80 per cent), while short term debt accounted for 18 per cent of the total.

Indeed, given Ukraine s large bond debts, many of which will mature in the next two years, there is a 15.3 billion funding gap in the bailout package, which the IMF and Ukraine s government hope to plug with a debt restructuring. But, even if they succeed, Ukraine would need more funding than it is getting.

The debts owed to the Fund by these countries were reduced by rescheduling them over a period of 40 years, including a 16 year grace period, with interest rates ranging from 0.5 per cent to 2 per cent.

Even for those benefiting from the HIPC Initiative, the economic conditions on which their debt relief was based have considerably worsened, and several countries, including those few that received debt relief, have backtracked into further unsustainable debt.

Well, I hope you're looking forward to our lunch.

The ECB will service (as opposed to purchase) a portion of every maturing government bond corresponding to the percentage of the member state s public debt that is allowed by the Maastricht rules. Thus, in the case of member states with debt to GDP ratios of, say, 120 and 90 , the ECB would service, respectively, 50 and 66.7 of every maturing government bond.

The document will also assess medium term prospects for export led growth, taking into account recent trends in investment, the external debt burden and the possible impact of the new debt initiative on heavily indebted poor countries (HIPCs).

This shall be done through the recording of an obligation(s), against which relevant payments or disbursements, made only on fulfilment of contractual and other obligations, shall be recorded as expenditure.

This obligation expired 31 12 2004 and no further provision has been made.

Expenditure Liquidation of prior period obligations

Even if public debt is not growing as fast as before, the huge volume of existing debt must be repaid. The best cure would be controlled higher inflation that is, the aforementioned temporary increase in the inflation target to erode the real value of public debt and forestall the risk of a much more damaging inflationary shock later, one in which expectations become unhinged.

(a) The responsibility of any other company in the group for the external debts of the insolvent company (being all debts owed by the insolvent company except for those owed to related group companies, i.e. intra group debts )

Overall, short term debt and total debt service also declined.

We are, however, concerned that many African countries remain burdened by debt, and we call for urgent measures to address the debt crisis of those countries.

With total short term obligations estimated at 68.4 billion,14 the package thus covered 88 per cent of those obligations.

(b) Recognition that debtor States can invoke the rebus sic stantibus principle (fundamental change of circumstances rule) (the obligation is extinguished and the debtor is released from it when its fulfilment is impossible, very onerous or essentially different from when the debt was contracted)

(a) the commencement or continuation of individual actions or proceedings concerning the debtor apos s assets, rights, obligations or liabilities shall be stayed and

(a) the commencement or continuation of individual actions or individual proceedings concerning the debtor apos s assets, rights, obligations or liabilities are stayed

(a) the commencement or continuation of individual actions or individual proceedings concerning the debtor apos s assets, rights, obligations or liabilities are stayed

Although Mexico s traditional debt indicators appeared sustainable, with moderate ratios of debt service, debt stock to exports and interest payments to exports (a ratio similar to the debt service ratio), the ratio of short term debt to reserves amounted to 131 per cent in 1997 (the ratio was much higher in 1996).