Download or read book Default and Renegotiation written by Oliver D. Hart and published by . This book was released on 1997 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and the repayment -- under the assumption that some debt contract is optimal. In the second part we consider a more general class of (non-debt) contracts, and derive sufficient conditions for debt to be optimal among these.

Download or read book Default and Renegotiation written by Oliver D. Hart and published by . This book was released on 1997 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book DEFAULT AND RENEGOTIATION A DYNAMICS MODEL OF DEBT written by Oliver Simon D'Arcy HART and published by . This book was released on 1989 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Serial Default and Debt Renegotiation written by Tamon Asonuma and published by . This book was released on 2014 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters even with the same debt-to-GDP ratio. This paper explains this stylized fact within a dynamic stochastic general equilibrium framework by explicitly modeling renegotiations between a defaulting country and its creditors. The quantitative analysis of the model reveals that the equilibrium probability of default for a given debt-to-GDP level is weakly increasing with the number of past defaults, consistent with empirical observations. The equilibrium of the model also accords with an additional observed fact: a country for which default terms require less than a 100 percent recovery rate tends to pay a higher rate of return (relative to a risk-free rate) on subsequently issued debt than do defaulting countries that agree to a full recovery rate.

Download or read book The Economics Of International Debt Renegotiation written by Boon-Chye Lee and published by Routledge. This book was released on 2019-09-06 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: The author considers the risks that the failure of Third World economies pose for highly exposed banks, whose collapse would threaten domestic as well as international financial systems.

Download or read book Default and Renegotiation written by I-Tsung Tsai and published by . This book was released on 2007 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: (Cont.) (3) For any given initial capital investment, the agent's optimal cost-reducing effort decreases with the magnitude of debt. (4) For any given initial capital investment, the agent's optimal cost-reducing effort increases with the magnitude of a performance bond when the contract is one with no positive self-enforcement effect. The theoretical result is consistent with the conventional wisdom that internal equity and performance bond generally enhance the agent's devotion to a PPP contractual relationship. This research also contributes a (subjective) PPP contract valuation method that takes into account the underlying agency problem.

Download or read book Why Don t Lenders Renegotiate More Home Mortgages written by Manuel Adelino and published by DIANE Publishing. This book was released on 2011 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a print on demand edition of a hard to find publication. Servicers have been reluctant to renegotiate mortgages since the foreclosure crisis started in 2007, having performed payment-reducing modifications on only 3% of seriously delinquent loans. This reluctance does not result from securitization: Servicers renegotiate similarly small fractions of loans that they hold in their portfolios. The paper¿s results are robust to different definitions of renegotiation, including the one most likely to be affected by securitization, and to different definitions of delinquency. Redefault risk, the possibility that a borrower will still default despite costly renegotiation, and self-cure risk, the possibility that a seriously delinquent borrower will become current without renegotiation, make renegotiation unattractive to investors. Illus.

Download or read book Default Foreclosure and Strategic Renegotiation written by Charles M. Kahn and published by . This book was released on 1989 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Sovereign Debt Structure Default and Renegotiation written by Ran Bi and published by . This book was released on 2008 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Default Risk Renegotiation And The Valuation Of Corporate Claims to 10 Pages 11 to 20 Pages 21 to 30 Pages 31 to 40 Pages 41 to 50 Pages 51 to 60 Pages 61 to 70 Pages 71 to 80 Pages 81 to 84 written by Jing-Zhi Huang and published by . This book was released on 1998 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Default and Renegotiation in PPP Auctions written by Flávio Marques Menezes and published by . This book was released on 2013 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Sovereign Debt Renegotiation and Credit Default Swaps written by Juliana Salomao and published by . This book was released on 2020 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: A credit default swap (CDS) contract provides insurance against default. After a country defaults, the country and its lenders usually negotiate over the share of the defaulted debt to be repaid. This paper incorporates CDS contracts into a sovereign default model and demonstrates that the existence of a CDS market results in lower default probability, higher debt levels, and lower financing costs for the country. Since the CDS payout is not automatically triggered by losses from renegotiations, the lender needs to be compensated for lower expected insurance payments. This leads to higher debt repayment in renegotiation, decreasing the benefits of defaulting, and hence allowing the country to borrow more at lower rates. Uncertainty over the insurance payout when the debt is renegotiated explains why in the data, as the output declines, the CDS spread becomes lower than the bond spread. Furthermore, this pricing dynamic during a debt crisis can be used to infer market perceptions of the probability of the CDS paying out after a renegotiation. The model is calibrated to Greek data, the results show that increasing CDS levels from 0 to 5% of debt lowers the unconditional default probability from 2.6% to 2.0% per year with no impact on debt level. Further increasing the CDS to 40% of debt increases the equilibrium debt level by 15%.

Download or read book Default and Renegotiation of Latin American Foreign Bonds in the Interwar Period written by Erika Jorgensen and published by . This book was released on 1988 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the patterns of defaults, renegotiations, and final settlements on foreign borrowing of several Latin American governments in the interwar period. One goal of the paper is to provide a detailed historical account of the borrowing and renegotiation experience of five Latin borrowers (Argentina, Bolivia, Chile, Colombia, and Peru). Another goal is to provide a quantitative assessment of the amount of debt relief that was implicit in the negotiated settlements of the defaults that were reached in the 1930s and 1940s. In general, the pattern of default and renegotiation resulted in substantial, though not complete, debt relief, in the sense of reducing the present value of debt repayments from the sovereign borrower to the bondholders.

Download or read book Adaptation and Renegotiation of Contracts in International Trade and Finance written by Norbert Horn and published by Springer. This book was released on 1985-02-18 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: Adaptation and Renegotiation of Contracts in International Trade and Finance

Download or read book Default Risk Renegotiation and the Valuation of Corporate Claims written by Jing-zhi Huang and published by . This book was released on 1997 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Renegotiation of Financial Contracts written by Michael R. Roberts and published by . This book was released on 2011 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a large sample of private credit agreements between US publicly traded firms and financial institutions, we show that over 90% of long-term debt contracts are renegotiated prior to their stated maturity. Renegotiations result in large changes to the amount, maturity, and pricing of the contract, occur relatively early in the life of the contract, and are rarely a consequence of distress or default. Our analysis of the determinants of renegotiation reveal that the accrual of new information concerning the credit quality, investment opportunities, and collateral of the borrower, as well as macroeconomic fluctuations in credit and equity market conditions, are the primary determinants of renegotiation and its outcomes. The terms of the initial contract (e.g., contingencies) also play an important role in renegotiations; by altering the structure of the contract in a state contingent manner, renegotiation is partially controlled by the contractual assignment of bargaining power.

Download or read book Why are Developing Nations So Slow to Play the Default Card in Renegotiating Their Sovereign Indebtedness written by Ross P. Buckley and published by . This book was released on 2020 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Before 1982 sovereign debtors regularly defaulted on their debts. Since the debt crisis that commenced in that year, sovereign defaults have been rare and usually quite quickly remedied, even though crises have been occurring with increasing frequency. This article seeks to answer why there might have been this change, and whether it is in the debtors' interests. The party with the most power in any negotiation is the party that needs the negotiated result the least. To display this power, a party must be willing to walk away from the negotiating table. As the House of Lords has found, each party “[is] entitled, if he thinks it appropriate, to threaten to withdraw ... or to withdraw in fact, in the hope that the opposite party may seek to reopen the negotiations by offering him improved terms.” Yet, in sharp contradistinction to the historical pattern, in the past twenty-five years developing nation debtors have been consistently reluctant to stop servicing their debt, to default, even when doing so might well have increased their power in the renegotiation of their debt. Why might this be so? And has this been a productive approach to debt renegotiation? This article seeks to answer these two questions. In seeking these answers the best place to begin is with some history.