Debt Rescheduling with Multiple Lenders: Relying on the Information of Others

Subject Impact of COVID-19 on Sri Lanka's debt situation. Significance Sri Lanka depends heavily for its foreign exchange on remittances and tourism, both of which have been hit hard by the COVID-19 crisis. Even before the pandemic, the country was struggling with debt and reliant on IMF support to shore up its economy. Impacts President Gotabaya Rajapaksa’s government will pursue balanced diplomacy, seeking strong ties with both Beijing and Delhi. Prime Minister Mahinda Rajapaksa will likely secure a mandate for a full term as premier in a parliamentary election scheduled for June. Colombo will struggle to cast aside its dependence on short-term borrowing.

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The Foreign Sovereign Immunities Act and Public Debt Litigation: Some Fifteen Years Later

The American Journal of International Law ◽

10.2307/2204099 ◽

1994 ◽

Vol 88 (2) ◽

pp. 257-279 ◽

Cited By ~ 7

Author(s):

Georges R. Delaume

Keyword(s):

United States ◽

Supreme Court ◽

Public Debt ◽

United States Supreme Court ◽

The United States ◽

United States Supreme ◽

Debt Rescheduling ◽

The Impact ◽

Difficult Situations

The decision of the United States Supreme Court in Republic of Argentina v. Weltover, Inc. is an invitation to reassess the impact of the Foreign Sovereign Immunities Act (FSIA) upon public debt litigation. In contrast with other activities of foreign states, which have been the object of extensive and continuing litigation, barely two dozen cases involving public debt disputes have been reported since the FSIA took effect. Whether this situation is attributable to the care with which transnational loan documents are usually drafted or to some other reasons, including possibly the contemporary tendency to rely on debt rescheduling as a means of remedying difficult situations, is an interesting matter of speculation. Whatever the explanation for the relatively limited number of public debt cases, Weltover can be expected to have a decisive impact upon future litigation.

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Bankers' Dilemmas: Private Cooperation in Rescheduling Sovereign Debts

World Politics ◽

10.2307/2010356 ◽

1985 ◽

Vol 38 (1) ◽

pp. 200-225 ◽

Cited By ~ 26

Author(s):

Charles Lipson

Keyword(s):

Capital Markets ◽

Foreign Capital ◽

Central Banks ◽

International Capital ◽

International Capital Markets ◽

International Debt ◽

Daily Interactions ◽

Financial Interests ◽

Debt Rescheduling

Cooperation among creditors has been the foundation of international debt arrangement! and is critical to preserving the value of foreign capital. Such cooperation is inherently difficult because every debt rescheduling involves hundreds of banks worldwide, each witr its own financial interests. Nevertheless, large money-center banks have been able to devisi common negotiating positions and conclude rescheduling agreements. Their cooperation i based partly on their extensive daily interactions, which permit both reciprocity and retal iation. In addition, most large banks are permanent fixtures in international capital markets; their ties to other banks and foreign borrowers could be jeopardized if they obstructed a rescheduling. Smaller banks, which lack these international ties, are more apt to hold out from joint arrangements. To secure their agreement, creditor committees (composed of large banks) rely on their domestic ties to these smaller institutions, which is occasionally reinforced by support from central banks.

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