Debt Restructuring Techniques

 

Debt restructuring encompasses a number of techniques used to deal with debt crises arising from both liquidity and solvency problems. This module will look at the existing institutional setup and principles to deal with debt restructuring for various categories of debt e.g.

 

• Paris Club – for bilateral credits

• London Club – for handling commercial debt workouts

 

We will also explore the particular difficulties encountered in restructuring domestically issued bond  (which are sometimes bought by non-residents) as well as recent developments aimed at making the restructuring of such instruments easier (e.g. “collective action clauses”).

 

The last part of the course will focus on various techniques and derivative products such as debt swaps, buy back, options etc. used in PDM.