Sovereign Debt Maturity Under Asymmetric Information

2013 ◽  
Author(s):  
Diego Perez
Keyword(s):  
Asymmetric Information ◽  
Sovereign Debt ◽  
Debt Maturity

Developing-country resource extraction with asymmetric information and sovereign debt: a theoretical analysis

1997 ◽  
Vol 2 (3) ◽  
pp. 265-289
Author(s):  
JON STRAND
Keyword(s):  
Growth Rate ◽  
Interest Rate ◽  
Asymmetric Information ◽  
Developing Country ◽  
Sovereign Debt ◽  
Resource Extraction ◽  
Probability Of Default ◽  
Rapid Extraction ◽  
The Interest Rate ◽  
Period Model

We consider a two-period model of an indebted developing country endowed with a natural resource whose extraction causes negative global externalities, where the country may borrow in period one and there is asymmetric information about its willingness to service its loans. We show that when the resource is large, the interest rate on new borrowing equals the resource growth rate. A greater initial debt level then leads to reduced new borrowing and more rapid extraction. An outside 'donor' may affect the resource extraction of the country. Donor schemes that tie debt reduction to postponing or abstaining from extraction of the resource are more powerful than non-conditional schemes in reducing the extraction rate for governments that actually repay, but may in some cases lead to a greater probability of default through increased debt. While conditional schemes generally are potentially Pareto-superior to non-conditional ones, the welfare of the borrowing country is higher with non-conditional schemes.

scholarly journals Debt Maturity, Risk, and Asymmetric Information

2004 ◽  
Author(s):  
Allen N. Berger ◽  
Marco A. Espinosa ◽  
W. Scott Frame ◽  
Nathan H. Miller
Keyword(s):  
Asymmetric Information ◽  
Debt Maturity

Economic uptick may not spell recovery in Brazil

2020 ◽  
Keyword(s):  
Risk Aversion ◽  
Sovereign Debt ◽  
Market Risk ◽  
Debt Maturity ◽  
Bright Spot ◽  
Content Type ◽  
Interest Payments ◽  
Fiscal Spending

Significance Indicators bottomed out after April. Most economists now expect GDP to contract by 5.5-6.0% this year, a severe blow to an economy that had yet fully to recover the ground lost in the brutal 2015-16 recession, but less than the highly pessimistic forecasts prevailing during the initial months of the pandemic. Impacts Lower rates have reduced fiscal spending on interest payments, a rare bright spot on the fiscal side. Inflation remains low but fiscal deterioration may prevent further rate cuts. The recent fall in sovereign debt maturity could leave Brazil more exposed to sudden changes in market risk aversion.

scholarly journals Debt Maturity, Risk, and Asymmetric Information

2004 ◽  
Vol 2004 (60) ◽  
pp. 1-40 ◽  
Author(s):  
Allen N. Berger ◽  
◽  
Marco A. Espinosa-Vega ◽  
W. Scott Frame ◽  
Nathan H. Miller
Keyword(s):  
Asymmetric Information ◽  
Debt Maturity

scholarly journals What drives sovereign debt maturity in European countries?

2018 ◽  
Vol 65 (2) ◽  
pp. 137-161
Author(s):  
Marcos González-Fernández ◽  
Carmen González-Velasco
Keyword(s):  
Sovereign Debt ◽  
Negative Relationship ◽  
Debt Maturity ◽  
European Countries ◽  
Standard Errors ◽  
Sovereign Risk ◽  
Positive Relation ◽  
Quantile Regressions ◽  
The Impact ◽  
Entire Distribution

The aim of this paper is to study the determinants of sovereign debt maturity for 23 European countries during the period between 1995 and 2013. For this purpose, we use quantile regressions with robust standard errors clustered by countries to consider the impact of the determinants in the entire distribution. The results indicate a positive relation between the level of debt of the country and sovereign debt maturity, particularly for countries with the lowest debt maturity. We also find evidence of a negative relationship between sovereign risk and debt maturity for the lowest and intermediate values of the debt maturity.

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