

<head> Tipster Topic Description

<num> Number: 004

<dom> Domain: International Finance

<title> Topic: Debt Rescheduling


<desc> Description: Document will discuss a current debt rescheduling
agreement between a developing country and one or more of its
creditor(s).


<narr> Narrative:

A relevant document will discuss a current debt rescheduling agreement
reached, proposed, or being negotiated between a debtor developing
country and one or more of its creditors, commercial and/or official.
It will identify the debtor country and the creditor(s), the repayment
time period requested or granted, the monetary amount requested or
covered by the accord, and the interest rate, proposed or set.


<con> Concept(s):

1. rescheduling agreement, accord, settlement, pact

2. bank debt, commercial debt, foreign debt, trade debt, medium-term
debt, long-term debt

3. negotiations, debt talks

4. creditor banks, creditor countries/governments, Paris Club

5. debtor countries, developing countries

6. debt package

7. debt repayments

8. restructuring, rescheduling existing loans

9. lower interest-rate margin, easier terms, more lenient terms


<fac> Factor(s):

<nat> Nationality: Developing country

<time> Time: Current

</fac>


<def> Definition(s):

Debt Rescheduling - Agreement between creditors and debtor to provide
debt relief by altering the original payment terms of an existing
debt.  This is most often accomplished by lengthening the original
schedule for principal and interest payments, and deferring interest
payments.  Done most publicly by developing countries and their
bankers, but often less publicly by other willing creditors and
debtors, e.g., governments, banks and companies.  Much in vogue in the
early 1980s, the road to rescheduling for countries in crisis runs as
follows: when a country borrows so much that its lenders grow nervous,
the banks start lending for shorter and shorter maturities.
Eventually the country, though still paying interest on its debt, is
unable to make payments on the principal.  The country is then forced
to request a rescheduling, which means that it is able to escape its
immediate repayment commitments by converting short-term loans into
longer-term ones.  A country wishing to reschedule its official debt
tal