A Primer on Sovereign Debt Buybacks and Swaps

51 Pages Posted: 19 Mar 2007

See all articles by Carlos I. Medeiros

Carlos I. Medeiros

International Monetary Fund (IMF)

Magdalena Polan

International Monetary Fund (IMF)

Parmeshwar Ramlogan

International Monetary Fund (IMF)

Date Written: March 2007

Abstract

This paper sets forth some basic principles that could help debt managers in emerging market and other countries to plan and implement sovereign debt buyback and swap operations. It discusses the macroeconomic context in which buybacks and swaps are undertaken, the objectives of buybacks and swaps, the analytical framework for deciding whether to undertake a particular buyback or swap operation and for selecting among alternative operations, and some key issues in the determination of the strategy for executing buybacks and swaps. The focus is on developing the analytical framework for evaluating sovereign debt buyback and swap operations, since very little work has been done in this area. In this regard, the paper presents a step-wise decision-making procedure, in which discounted cash flow analysis and the use of strategic benchmarks for the debt play central roles.

Suggested Citation

Medeiros, Carlos I. and Polan, Magdalena and Ramlogan, Parmeshwar, A Primer on Sovereign Debt Buybacks and Swaps (March 2007). Available at SSRN: https://ssrn.com/abstract=973988 or http://dx.doi.org/10.2139/ssrn.973988

Carlos I. Medeiros (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Magdalena Polan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Parmeshwar Ramlogan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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