Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings [electronic resource] Kozack, Julie.
- Washington, D.C. : International Monetary Fund, 2005.
- IMF eLibrary
IMF Policy Discussion Papers; Policy Discussion Paper No. 05/09.
IMF Policy Discussion Papers; Policy Discussion Paper No. 05/09
- Government document
1 online resource (29 p.)
- Local subjects:
- Amount of debt.
Cash flow calculations.
Debt restructuring operation.
Discounted cash flow.
Emerging market bond.
Internal rate of return.
International Financial Markets.
International Lending and Debt Problems.
Market discount rate.
Net present value.
Net present value of debt.
Nominal interest rate.
Sovereign debt restructuring.
- Assessments regarding the effectiveness of sovereign debt restructurings are often summarized by comparisons of the net present value of debt service before and after the restructuring. These calculations are inherently sensitive to the choice of discount rate. This paper explores issues that arise in selecting discount rates when evaluating sovereign debt restructurings. It suggests using a range of discount rates and centering the analysis around the internal rate of return to assess whether the debt restructuring has generated net present value savings or costs to the debtor.
- Description based on print version record.
- Kozack, Julie.
- Other format:
- Print Version:
- Publisher Number:
- Access Restriction:
- Restricted for use by site license.
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