Issues in Debt Strategy: An Overview
- Peter Wickham, Jacob Frenkel, and Michael Dooley
- Published Date:
- March 1989
- W. MAX CORDEN and MICHAEL P. DOOLEY*
This paper touches on many topics relating to the debt strategy that are also discussed elsewhere in this book. Because of the market discount on debt, an inadequate share of world savings may be going to indebted countries. Various “growing out of debt” scenarios are expounded, and the roles of concerted lending and of the policies of debtor countries in affecting the availability of new funds are discussed. The paper outlines the essential features of buy-backs, of securitization, of debt-equity swaps and of the transformation of debt into contingent claims, and also the implications of debt relief for debtors and creditors and of an international debt facility.