Sovereign Bond Contracts: Flaws in the Public Data?

28 Pages Posted: 6 Jun 2018 Last revised: 6 Sep 2018

See all articles by Andrea E. Kropp

Andrea E. Kropp

Duke University School of Law

G. Mitu Gulati

Duke University School of Law

Mark C. Weidemaier

University of North Carolina School of Law

Date Written: May 21, 2018

Abstract

Commercial databases now make available to paying clients information about the legal terms in sovereign loan contracts. This information is important to academic researchers, to policy institutions such as the International Monetary Fund, and to investors and other market actors. For a random sample of ten countries, we compare this data to a hand-coded sample of bond terms. We find significant error rates in the commercial databases, which vary by country and by the legal term at issue. In some cases, we document error rates well over 75 percent. We also describe important limitations in the data, especially the use of binary coding schemes that obscure important differences in the rights conferred by different sovereign loan contracts.

Keywords: sovereign debt, sovereign bonds, contracts

JEL Classification: G15, H63, F34

Suggested Citation

Kropp, Andrea and Gulati, Gaurang Mitu and Weidemaier, Mark C., Sovereign Bond Contracts: Flaws in the Public Data? (May 21, 2018). Duke Law School Public Law & Legal Theory Paper No. 2018-42; UNC Legal Studies Research Paper. Available at SSRN: https://ssrn.com/abstract=3182817 or http://dx.doi.org/10.2139/ssrn.3182817

Andrea Kropp

Duke University School of Law ( email )

Durham, NC
United States

Gaurang Mitu Gulati

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Mark C. Weidemaier (Contact Author)

University of North Carolina School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States
919.843.4373 (Phone)

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