Hidden Defaults

China’s lending boom to developing countries is morphing into defaults and debt distress. Given the secrecy surrounding China’s loans, also the associated defaults remain “hidden”, as missed payments and restructuring details are not disclosed. Thi...

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Bibliographic Details
Main Authors:	Horn, Sebastian, Reinhart, Carmen M., Trebesch, Christoph
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2022
Subjects:	DEBT SUSTAINABILITY DEBT SERVICE BURDEN CHINESE LENDING DISCLOSURE SOVEREIGN DEBT DEBT RESTRUCTURING DEBT RELIEF
Online Access:	http://documents.worldbank.org/curated/en/773311643912553263/Hidden-Defaults http://hdl.handle.net/10986/36965

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recordtype	oai_dc
spelling	okr-10986-369652022-02-11T05:10:31Z Hidden Defaults Horn, Sebastian Reinhart, Carmen M. Trebesch, Christoph DEBT SUSTAINABILITY DEBT SERVICE BURDEN CHINESE LENDING DISCLOSURE SOVEREIGN DEBT DEBT RESTRUCTURING DEBT RELIEF China’s lending boom to developing countries is morphing into defaults and debt distress. Given the secrecy surrounding China’s loans, also the associated defaults remain “hidden”, as missed payments and restructuring details are not disclosed. This paper constructs an encompassing dataset of sovereign debt restructurings with Chinese lenders and finds that these credit events are surprisingly frequent, exceeding the number of sovereign bond or Paris Club restructurings. Chinese lenders follow a resolution approach reminiscent of 1980s Western lenders; they seldom provide deep debt relief with face value reduction. If history is any guide, multi-year debt workouts with serial restructurings lie in store. 2022-02-10T15:03:52Z 2022-02-10T15:03:52Z 2022-02 Working Paper http://documents.worldbank.org/curated/en/773311643912553263/Hidden-Defaults http://hdl.handle.net/10986/36965 English Policy Research Working Paper;No. 9925 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	DEBT SUSTAINABILITY DEBT SERVICE BURDEN CHINESE LENDING DISCLOSURE SOVEREIGN DEBT DEBT RESTRUCTURING DEBT RELIEF
spellingShingle	DEBT SUSTAINABILITY DEBT SERVICE BURDEN CHINESE LENDING DISCLOSURE SOVEREIGN DEBT DEBT RESTRUCTURING DEBT RELIEF Horn, Sebastian Reinhart, Carmen M. Trebesch, Christoph Hidden Defaults
geographic_facet	East Asia and Pacific China
relation	Policy Research Working Paper;No. 9925
description	China’s lending boom to developing countries is morphing into defaults and debt distress. Given the secrecy surrounding China’s loans, also the associated defaults remain “hidden”, as missed payments and restructuring details are not disclosed. This paper constructs an encompassing dataset of sovereign debt restructurings with Chinese lenders and finds that these credit events are surprisingly frequent, exceeding the number of sovereign bond or Paris Club restructurings. Chinese lenders follow a resolution approach reminiscent of 1980s Western lenders; they seldom provide deep debt relief with face value reduction. If history is any guide, multi-year debt workouts with serial restructurings lie in store.
format	Working Paper
author	Horn, Sebastian Reinhart, Carmen M. Trebesch, Christoph
author_facet	Horn, Sebastian Reinhart, Carmen M. Trebesch, Christoph
author_sort	Horn, Sebastian
title	Hidden Defaults
title_short	Hidden Defaults
title_full	Hidden Defaults
title_fullStr	Hidden Defaults
title_full_unstemmed	Hidden Defaults
title_sort	hidden defaults
publisher	World Bank, Washington, DC
publishDate	2022
url	http://documents.worldbank.org/curated/en/773311643912553263/Hidden-Defaults http://hdl.handle.net/10986/36965
_version_	1764486290513854464

Hidden Defaults

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