Sixteen members comprises the "club" of countries that have defaults in recent decades, which is speculated to enter Greece from a portion of the market.
The last "record" was one of ...
Jamaica, which came to be added in Russia, Ecuador, Pakistan, Ukraine, Ivory Coast, Argentina, Moldova, Uruguay, Grenada, Dominican Republic, Belize, the Seychelles, Cameroon, Nicaragua and .....
Venezuela:
The "landscape" of state moratoria period 1983-2010 outlines the study of Moody's.
Among other things, that the average rate for the "clipping" the value of bonds (where it occurs) is formed in 53%. However, the two largest bankruptcies (Russia 1998 and Argentina in 2001) the rate was even higher.
Ecuador is the only country that has declared a moratorium twice (1999 and 2008), the second case, when Moody's-be due to the reluctance of the country to pay the debt and not the inability, as the government after accounting audit of part of debt classified as "illegal" ...
RUSSIA
"Hole" in oil revenues
O dance major moratoria opened in 1998 with Russia, which saw its exports to hit a key on the big dip in oil prices that began in late 1997. This development caused great "hole" in revenue, while the volume of short-term Treasury bills rose sharply. Faced with the high cost of servicing domestic debt, the Russian government has accelerated the release of the Treasury market, lifting restrictions on foreign participation. The Russian market benefited from inflows of speculative capital, at the time interest rates in the Treasury took on rising, "hitting the ceiling" in August 1997 (13%). The emergency loan taken by the government by the IMF in the summer of 1998 failed to boost confidence and ultimately occurred in; fatal (moratorium). The loans, totaling U.S. $ 72 billion, restructured the period August 1999 - February 2000 brave "haircut" of 75% -80%.
UKRAINE
Restructuring in four phases
The restructuring of the Ukrainian debt took place in four phases over the 1998-2000 period, accounting for $ 2.5 billion external debt (Eurobonds) and 300 million domestic debt. The "selective" restructuring of domestic debt held by banks in August of '98 followed the restructuring of two major publications that foreign investors had the next two months and a further restructuring in June 1999. After these partial moves, attempted a more comprehensive approach in 2000: Earlier this year, the Ministry of Finance announced the repayment of non-dollar bond with a coupon of 16.75% and proposed to exchange for new securities in dollars or euros with a seven-year grace period (interest only payment) and lower coupons. At the end of March 2000, 90% of the bondholders agreed to accept the restructuring and netous securities with a nominal value of 50% that of the bonds were replaced.
ECUADOR
Stop paying twice
Ecuador ... struck twice in the international financial markets: The first was in 1999 when the country was officially declared to stop paying much interest on bonds. The U.S. and the International Monetary Fund publicly supported the efforts of the Latin American country to restructure its external debt, amounting to 13 billion in Quito also declared moratorium and domestic debt unilaterally changing interest rates. The percentage of "clipping" was the order of 30% -60%. The second (and ... more poison) moratorium that was in November 2008 when the government announced that it will repay its international debt maturing in 2012 and 2030 respectively, accounting audit concluded that the debt was "illegally and lacked legitimacy. In May 2009 announced restructuring plan that included a "haircut" 65% of the nominal value of bonds. Subsequently, Ecuador bought back 91% of the default rates of securities.
JAMAICA
Mild restructuring of domestic debt
Last link in the chain of moratoria were Jamaica last year. The Caribbean country has completed a modest restructuring of domestic debt in February 2010 aimed at improving the fiscal position, and the ratio of debt to GDP was stable for more than 100% over a decade, the ratio of debt to income ratio was formed to 400%. Jamaica has produced hand primary surpluses in recent years (and even 10% of GDP (!), But with a heavy price for development. The restructuring did not affect the external debt, but all the freely tradable domestic debt (60% of GDP). There was a reduction of capital, but only of coupons (from 17% to 11% on average), and lengthen the maturity of the securities in five years from two. The share of debt securities amounted to 99%, " haircut "was negligible (less than 5%) and caused significant disruption to the economy and the banking sector in the country.
VENEZUELA
Bankruptcy accidentally ...
In July 1998, the Venezuelan government waited a week to pay interest on bonds worth 270 million dollars. Since there is no grace period, the delay amounted to a moratorium. The government attributed the delay to be lacking an official who signed the money orders! After this episode, Caracas installed modern equipment and do not require human intervention during the payment process.
IVORY COAST
Scented coup
The African country froze its external debt in 1997, after the bloodless coup by General Goose, but resumed payments in January 1998. In 2000, however, the Ivory Coast defaults on bonds of $ 410 million and restructured in consultation with the creditor countries of the Paris Club (which involves the 19 largest developed economies), the percentage of "clipping" exceed 80%.
PERU
Government vs. Elliott
To September 2000, the government of Peru has decided not to pay interest on bonds amounting to U.S. $ 80 million and entered into negotiation with the lender, the fund Elliott: Peru has proposed to restructure the debt into bonds Brady, but Elliott has not only renounced but filed a lawsuit against the Fujimori government. Finally, after four weeks of negotiations, Peru has paid 80 million dollars and the moratorium "cured" within the grace period.
PAKISTAN
'Nuclear' moratorium
To Pakistan declared a moratorium in 1999, following the acute balance of payments crisis triggered by the international sanctions after the nuclear test conducted in 1998. In December 1999 the creditors received new six-year securities with a coupon of 10% and three-year grace period in exchange for existing bonds of $ 608 million maturing in the period December 1999 - February 2002. The bondholders were "haircut" of 50%.
MOLDOVA
From Russia with love ...
The former Russian republic of Moldova suffered a major blow by the crisis of "Mother Russia" in 1998, was the largest export market. The country's reserves "dried out, resulting in difficult to service its external debt. Nevertheless, he avoided the moratorium until July 2002, when said failure to pay U.S. $ 75 million bond, then negotiated restructuring with creditors who accepted "clipping" 40%.
DOMINICAN REPUBLIC
Consideration in kind ...
H country declared moratorium on debt $ 1.1 billion in April 2005. 95% of bondholders agreed to the extension of time to repay loans for five years and agreed to be paid in kind (with new bonds) in place of all the interest due in 2005 and half of 2006.
BELIZE
Mild restructuring
The government announced in August 2006 that it would restructure its external debt agreement with its creditors: In terms agreed received 98% of bondholders who exchange existing bonds for new securities maturing in 2029, to begin repayment of the capital 2019 and lower coupons. The "haircut" is estimated at 25%.
Broad definition
What is a moratorium on the Moody's
Especially large is the definition given by Moody's to the concept of the state moratorium, as it includes "all events that change the relationship between creditor and debtor in connection with the terms of the original loan contract and causing financial loss to the Holder. This includes the following types of moratorium:
1. The non repayment or delayed repayment of an installment loan (principal and / or interest) unless it occurs during the grace period stipulated in the contract, so that 'cure' the moratorium.
2. The so-called distressed exchange, where the issuer of the bond proceeds to debt rescheduling or offering creditors new package of securities, cash or assets, which represents a reduction of the amount payable in relation to the original obligation.
3. Although this is rarely practical, some government actions that modify the original contractual relationship between the state and creditors and cause damage to the latter may constitute a moratorium. For this reason, Moody's considered moratorium on taxation (especially with retroactive effect) the interest of all domestic currency bonds issued by the Turkish government before December 1, 1999. This is because although the terms of the bonds were not changed directly, the government unilaterally reduced the nominal amount promised to pay the creditors, taxing the coupons of the bonds to maturity. Finally moratorium is considered the involuntary extension of time to repay bonds.
The "violent" and "consensual" restructuring
"Lives opposed" to Argentina - Uruguay
H Argentina announced the suspension of payments by the end of 2001, but "technically" the moratorium was held on January 3, 2002, when it stopped servicing its debt. There were three factors behind the largest state "canon" of all time:
First, the Menem government's decision to link the Argentine peso to the dollar at a fixed rate, which "dried up" the country's exports and foreign direct investment in it after the devaluation of the Brazilian Real in 2002, having made the products of the neighboring Brazil more competitive.
Secondly, the government has accumulated a huge debt (domestic and foreign), leading interest rates soaring. This resulted in the freezing of investments in the country led to a wave of business padlocks and jump in unemployment and the recession deepened course (started in 1997).
Finally, the IMF refused to provide the next installment of the loan, effectively pressing the "trigger".
Social unrest
The moratorium, combined with the collapse of government, devaluing and intense social upheaval, launched the public debt of Argentina from 63% of GDP at the end of 2001 to 150% of GDP. The country owed approximately $ 100 billion in domestic and foreign creditors.
Debt restructuring, which lasted almost 5 years and ended with "haircut" over 70% for the bond to Buenos Aires to set unilaterally the terms ... a not so consensual process: in particular, offered new bonds in 2005 a net present value of only 27% of the original and not only refused to recognize the interest of previous years, but also to satisfy the requirements of those who do not agree with the conditions. The IMF nevertheless marked "preferred lender" and got back in full all the money.
URUGUAY
Uruguay, and called the "Switzerland of South America" was challenged at the end of 2002 the crisis in neighboring Argentina.
The GDP was in free fall (-12%), businesses closed, people lost confidence in the banking system. The devaluation of the Uruguayan peso and the drastic reduction in public does not lessen the pressures on the public debt approaching 100% of GDP (11 billion U.S. dollars) with large maturities from 2003-2004.
To ensure the sustainability of debt and not to lose access to international markets, the government proposed in Montevideo in April 2003 voluntary "rescheduling» (re-profiling) of the 18 bond issues, with a lengthening of maturities of five years without reduce the principal or coupons. The process was completed relatively quickly (late May) and the proportion of bondholders exceeded 93%.
Uruguay came back to international markets in October 2003, five months after redeployment. The economy returned to growth trend in the year 2004 and "ran" the rate of 11% ...
L. Chrysanthopoulou
Posted by 9MOHAMED0 on Sunday, May 22, 2011
No comments:
Post a Comment