imf policy on lending into arrears to private creditors

7/21/2019 IMF Policy on Lending into Arrears to Private Creditors

1/16

LAE Ronlhy og

Ncg`lgi lgto Drrcdrs

to Rrlvdtc Hrc`ltors

Rrcpdrc` jy tfc Ronlhy @cvcnopacgt dg` Zcvlcw

dg` Ncidn @cpdrtacgts

LGPCZGDPLOGDN AOGCPDZ\ ESG@

Ydsflgitog, @H


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ll

4


3/16

lll

Rrcedhc@urlgi tfc hoursc oe 4


4/16

v

Hogtcgts Rdic

Rrcedhc lll

Xuaalgi Sp jy tfc Dhtlgi Hfdlradg, Cxchutlvc Jodr` Acctlgi, Kugc 40, 4


5/16

Pfc stdee pdpcr, Eug` Ronlhy og Drrcdrs to Rrlvdtc Hrc`ltorsEurtfcr Hogsl`crdtlogs, wds4

`lshussc` jy tfc LAE Cxchutlvc Jodr` og Kugc 40, 4


6/16

vlll

(ll) tfc acajcr ls pursulgi dpproprldtc ponlhlcs dg` ls admlgi d ioo` edltf

ceeort to rcdhf d honndjordtlvc dirccacgt wltf lts hrc`ltors.

@lrchtors dircc` tfdt Eug` ncg`lgi lgto gogsovcrclig drrcdrs stcaalgi eroa tfc

laposltlog oe cxhfdgic hogtrons sfoun` jc og d hdsc-jy-hdsc jdsls dg` ogny wfcrc;

(l) proapt Eug` support ls hogsl`crc` csscgtldn eor tfc suhhcsseun

lapncacgtdtlog oe tfc acajcrs d`kustacgt proirda= dg`

(ll) tfc acajcr ls pursulgi dpproprldtc ponlhlcs, ls admlgi d ioo` edltf

ceeort to edhlnltdtc d honndjordtlvc dirccacgt jctwccg prlvdtc `cjtors dg` tfclr

hrc`ltors, dg` d ioo` prospcht cxlsts eor tfc rcaovdn oe cxhfdgic hogtrons.

Lg jotf hdscs, dnn purhfdscs jy tfc acajcr woun` jc sujkcht, ds provl`c` dt prcscgt, to

elgdghlgi rcvlcws to jrlgi `cvcnopacgts dt dg cdrny stdic to tfc dttcgtlog oe tfc Cxchutlvc

Jodr`, dg` to provl`c dg opportuglty eor tfc Jodr` to hogsl`cr wfctfcr d`cqudtc sdeciudr`s

rcadlg lg pndhc eor eurtfcr usc oe tfc Eug`s rcsourhcs lg tfc acajcrs hlrhuastdghcs.Xpchlelhdnny, suhf rcvlcws woun` provl`c d jdsls to dsscss wfctfcr tfc acajcrs d`kustacgt

ceeorts drc hogsl`crc` to jc ug`cralgc` jy `cvcnopacgts lg hrc`ltor-`cjtor rcndtlogs.

@lrchtors gotc` tfdt tfc ponlhy outnlgc` djovc supcrsc`cs dnn prcvlous ponlhlcs

rcidr`lgi ncg`lgi lgto drrcdrs to prlvdtc hrc`ltors.

Elgdnny, @lrchtors gotc` tfdt lt woun` jc laportdgt to aogltor cxpcrlcghc wltf ncg`lgi

lgto drrcdrs dg` to mccp tfc ponlhy outnlgc` djovc ug`cr rcvlcw, so ds to cgsurc tfdt lt

dhflcvcs lts ojkchtlvcs.


7/16

Xcc tfc Hfdlradgs Xuaalgi Sp oe Eug` Lgvonvcacgt lg tfc @cjt Xtrdtciy, Cxchutlvc Jodr`:

Acctlgi 6


8/16

LAE RONLH\ OG NCG@LGI LGPO DZZCDZX PO RZLUDPC HZC@LPOZX

:

lgstdghcs wfcrc hrc`ltorspdrtlhundrny jog`fon`crshoun` cxcrhlsc d `c edhto vcto ovcr

Eug` ncg`lgi. Xcpdrdtcny, tfcrc ls d qucstlog wfctfcr tfc hrltcrld eor ncg`lgi lgto gogsovcrclig

drrcdrs stcaalgi eroa tfc laposltlog oe cxhfdgic rcstrlhtlogs drc too rcstrlhtlvc, ds tfcy ady

got tdmc d`cqudtc dhhougt oe tfc possljlnlty tfdt, cvcg wfcg jotf hrc`ltors dg` `cjtors drc

wlnnlgi to pdrtlhlpdtc lg honndjordtlvc gciotldtlogs, tfc prohcss oe `cjt rcoridglzdtlog ady jc

protrdhtc`. Zcvlslogs to tfc hrltcrld drc suiicstc` eor jotf tfc sovcrclig dg` gogsovcrclig

hdscs. Pfc pdpcr dnso `lshusscs tfc possljlnlty oe dg d``ltlogdn hrltcrlog lg tfc gogsovcrclig

hdsc lgtcg`c` to protcht hrc`ltors lgtcrcsts `urlgi d pcrlo` oe gogpdyacgt stcaalgi eroa tfc

laposltlog oe cxhfdgic hogtrons.


9/16

Eor d `lshusslog oe jog` rcstruhturlgi jceorc d `cedunt, scc Lgvonvlgi tfc Rrlvdtc Xchtor lg0

Eorcstdnnlgi dg` Zcsonvlgi tfc Elgdghldn Hrlsls, LAE Rujnlhdtlog, Dprln 43, 4


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0

Lg hogtrdst, Jrltlsfstync jog`s hogtdlg d guajcr oe ecdturcs tfdt ady edhlnltdtc dg

or`crny rcstruhturlgi. Pfcrc drc two hoaaogny usc` ncidn struhturcs eor Jrltlsfstync jog`s;

Prust @cc`s dg` Elshdn Dicghy Dirccacgts. Jotf lghnu`c provlslogs eor tfc `cjtors,

jog`fon`crs, or tfc trustcc (le dppnlhdjnc) to hdnn jog`fon`cr acctlgis, dg` eor d qudnlelc`

adkorlty oe jog`fon`crs rcprcscgtc` dt tfc acctlgi to dircc to d ao`lelhdtlog oe tfc tcras

jlg`lgi og dnn fon crs oe tfc lssucrcidr`ncss oe wfctfcr tfcy wcrc rcprcscgtc` dt tfc

acctlgi. Aorcovcr, ug`cr Prust @cc`s (jut got Elshdn Dicghy Dirccacgts), lg`lvlùdn

jog`fon`crs drc icgcrdnny profljltc` eroa dhhcncrdtlgi tfc jog` dg` lgltldtlgi nltlidtlog.

Lgstcd`, dgy suhf dhtlog rcsts wltf tfc trustcc, dhtlgi og tfc lgstruhtlogs oe hrc`ltors fon`lgi d

spchlelc` proportlog oe prlghlpdn.

Lg hogtrdst to tfc cxpcrlcghc wltf syg`lhdtc` jdgm nodgs, wflhf wcrc icgcrdnny fcn`

wltflg d rcndtlvcny gdrrow rdgic oe jdgms, jog`s ady jc fcn` (dg` ercqucgtny trd`c`) jy d

wl`c rdgic oe elgdghldn lgstltutlogs, otfcr lgstltutlogdn lgvcstors, dg` lg`lvlùdns. Jog`fon`crs

ady lghnu`c lgvcstors wltf d wl`c rdgic oe dppctltcs eor rlsms dg` lgtcrcsts lg or`crnyrcstruhturlgis. Yflnc aost woun` prcsuadjny jc wlnnlgi to pdrtlhlpdtc lg dg or`crny

rcstruhturlgi, tfcrc ls d possljlnlty tfdt d algorlty ady rcsort to `lsruptlvc tdhtlhs lg or`cr to

ojtdlg d edvordjnc scttncacgt eroa tfc `cjtor, or to jc jouift out jy otfcr hrc`ltors.

@leelhuntlcs dssohldtc` wltf `lssl`cgt hrc`ltors drc nlmcny to jc pdrtlhundrny progoughc` lg tfc

hdsc oe Dacrlhdgstync jog`s. Pfc hogtrdhtudn provlslog oe Jrltlsfstync jog`s, lg hogtrdst,

rcùhcs sujstdgtldnny tfc dttrdhtlvcgcss oe tfcsc lgstruacgts eor lgvcstors sccmlgi to usc

nltlidtlog to ojtdlg d edvordjnc scttncacgt. (Sgncss lg`lvlùdn lgvcstors fon` d sliglelhdgt

proportlog oe dg lssuc, tfcy woun fdvc go dssurdghc tfdt otfcr hrc`ltors houn` got ao`ley

tfc tcras oe tfclr lgstruacgts, tfcrcjy potcgtldnny cnlalgdtlgi tfc jdsls eor nltlidtlog.)

D eurtfcr hoapnlhdtlog hoghcrgs tfc ronc oe elùhldry dicgts, wfo adgdic dsscts ogjcfdne oe lgvcstors fon`lgi tfc chogoalh (or jcgcelhldn) lgtcrcst. Xuhf dicgts drc nlmcny to pndy

dg laportdgt pdrt lg tfc rcstruhturlgi prohcss, ds adgy jog`s lgvonvc ogc or aorc elùhldry

rcndtlogsflps. Yltf tfc `cvcnopacgt oe tfc dssctjdhmc` schurltlcs adrmct (lg wflhf jog`s drc

rcpdhmdic` wltf elgdghldn `crlvdtlvcs to hrcdtc sygtfctlh lgvcstacgt opportugltlcs), tfc ncg`cr

oe rchor` hdg jc d spchldn purposc cgtlty wltf d elùhldry rcndtlogsflp wltf lgvcstors fon`lgi

tfc dssctjdhmc` schurltlcs. Xlalndrny, adgdicrs oe pcgslog dg` autudn eug`s fdvc elùhldry

rcspogsljlnltlcs to tfclr lgvcstors. Elùhldry dicgts fdvc jlg`lgi hogtrdhtudn ojnlidtlogs to

protcht lgvcstors lgtcrcsts, dg` drc dnso nlmcny to jc hoghcrgc` wltf tfc lapdht oe dgy `cjt

rcstruhturlgi og tfclr proecsslogdn rcputdtlogs. Pfcsc edhtors drc nlmcny to admc dicgts vcry

hdutlous, pdrtlhundrny lg hdscs lg wflhf tfc fon`crs oe tfc chogoalh lgtcrcst drc rcndtlvcny

ugsopflstlhdtc` lgvcstors, suhf ds lg tfc fouscfon` schtor. Pfls houn`, dt d alglaua,lgtroùhc protrdhtc` `cndys lgto tfc gciotldtlog prohcss, dg` houn` cvcg ncd` elùhldry dicgts

to lgltldtc nltlidtlog lg or`cr to protcht tfcascnvcs eroa hlvln sult. (Eor cxdapnc, lt ls

ug`crstoo` tfdt tfc `chlslog jy d adkor lgvcstacgt jdgm to lgltldtc nltlidtlog didlgst Zussldg

jdgms lg rcspcht oe `cedunts og eorwdr` hogtrdhts rcenchtc`, lg pdrt, rcspogsljlnltlcs stcaalgi

eroa lts elùhldry rcndtlogsflps wltf tfc fon`crs oe tfc chogoalh lgtcrcsts.)


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3

Yltfout hogtrdhtudn provlslogs to edhlnltdtc d hoor`lgdtc` rcstruhturlgi lg

Dacrlhdgstync jog`s, dg` lg tfc djscghc oe achfdglsas to nlalt tfc shopc eor potcgtldnny

`lsruptlvc nltlidtlog jy `lssl`cgt hrc`ltors, tfcrc ls d rlsm tfdt tfcrc houn` jc d edlnurc oe

honnchtlvc dhtlog, ncd`lgi to tfc prohcss oe rcstruhturlgi jchoalgi `lsor`crny dg` proùhlgi d

stdncadtc lg `cjtorhrc`ltor rcndtlogs. Pfcsc `leelhuntlcs houn` jc hoapoug`c` to tfc cxtcgt

tfdt tfcrc drc sliglelhdgt fon`lgis jy sohdnnc` vunturc hrc`ltors wfo spchldnlzc lg cxtrdhtlgi

sdnvdic vdnuc eroa `lstrcssc` `cjt, or elùhldry dicgts wfo fdvc nlaltc` shopc eor adgcuvcr

dg` drc tfus rcnuhtdgt to strlmc d `cdn og tfc jdsls oe tfclr hoaacrhldn kuìacgt. Xuhf

`leelhuntlcs houn` scrlousny hoapnlhdtc d acajcrs ceeorts to rcsonvc lts jdndghc oe pdyacgts

projncas. Aorcovcr, ugtln tfc acajcr fds rcdhfc` vonugtdry dirccacgt wltf dnn jog`fon`crs,

lt woun` rcadlg vungcrdjnc to tfc tfrcdt oe nltlidtlog eor dg cxtcg`c` pcrlo`.

Didlgst tfls jdhmiroug`, tfcrc ls d qucstlog oe fow dg` ug`cr wfdt hlrhuastdghcs tfc

Eug` hdg jcst dhflcvc lts ojkchtlvcs rcidr`lgi proaotlog oe ceechtlvc jdndghc oe pdyacgts

d`kustacgt eor acajcrs wlnnlgi to ug`crtdmc dpproprldtc ponlhlcs, wflnc sdeciudr`lgi tfcEug`s rcsourhcs.


12/16

5

LLL

Hogsl`crdtlogs og tfc Hrltcrld eor

Ncg`lgi lgto Drrcdrs

Drrcdrs og Xovcrclig Jog`s

Dt elrst jnusf, lt dppcdrs nlmcny tfdt lg aost hdscs prlvdtc hrc`ltors woun` jc wlnnlgi to

cgtcr lgto gciotldtlogs wltf sovcrclig `cjtors eonnowlgi d `cedunt wltf d vlcw to prcscrvlgi

tfc vdnuc oe tfclr dsscts. Fowcvcr, tfcrc ls dnso tfc possljlnlty tfdt hrc`ltors ady `cndy

gciotldtlogs eonnowlgi d `cedunt eor d vdrlcty oe rcdsogs. Elrst, ds dnnu`c` to djovc, tfc

fctcroicgclty oe tfc hrc`ltor jdsc houn` rcsunt lg hoor`lgdtlog `leelhuntlcs, hoapnlhdtlgi tfc

tdsm oe dsscajnlgi d rcprcscgtdtlvc hrc`ltor iroup. Xchog`, tfc hrc`ltor jdsc ady lghnu`c d

ndric cncacgt tfdt fds go ogiolgi lgtcrcst lg tfc `cjtor. Ds d rcsunt, tfc lghcgtlvcs to

gciotldtc, lgtcr dnld, lg or`cr to rcturg tfc `cjtor to ioo` stdg`lgi lg tfc lgtcrgdtlogdn elgdghldn

hoaauglty ady jc ncss tfdg eor hoaacrhldn jdgm hrc`ltors oe tfc 4


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rcidlglgi spogtdgcous dhhcss to lgtcrgdtlogdn hdpltdn adrmcts. Pfls woun` cro`c tfc hdtdnytlh

ceecht oe dgy Eug` lgvonvcacgt (pdrtlhundrny ug`cr suhhcssor drrdgicacgts) dg` houn`

ug`cralgc tfc dutforltlcs hogtlguc` djlnlty to lapncacgt d`kustacgt proirdas. Pfls, lg turg,

woun` rdlsc scrlous hoghcrgs rcidr`lgi tfc djlnlty to ojtdlg d`cqudtc elgdghlgi dssurdghcs.

Pfus, cvcg le tfc rcqulrcacgt tfdt gciotldtlogs wltf hrc`ltors fdvc jciug wcrc ao`lelc` ds

suiicstc` djovc, d qucstlog woun` rcadlg ds to wfctfcr cdrny Eug` lgvonvcacgt eonnowlgi d

`cedunt og lgtcrgdtlogdn jog`s houn` lg dnn hdscs scrvc to proaotc jdndghc oe pdyacgts

d`kustacgt, wltf gchcssdry sdeciudr`s eor tfc Eug`s rcsourhcs, ds ceechtlvcny ds lt fds lg tfc

hdsc oe drrcdrs to hoaacrhldn jdgms. (Pfcsc hoghcrgs woun` jc oe pdrtlhundr rcncvdghc lg

hdscs wltf `cjt struhturc` ds Dacrlhdgstync lgstruacgts.) Pfls lssuc houn` jc d``rcssc` lg

tfc hogtcxt oe elgdghlgi rcvlcws, wflhf woun` provl`c dg opportuglty to hogsl`cr wfctfcr

d`cqudtc sdeciudr`s rcadlg lg pndhc eor eurtfcr usc oe Eug` rcsourhcs.

Lg nlift oe tfc ndhm oe cxpcrlcghc lg hdscs oe sovcrclig jog` `cedunt dg` fow suhf d

sltudtlog woun` cvonvc, lt woun` jc pru`cgt to acgtlog tfc provlslog rcqulrlgi tfdt dnn`rdwlgis jy d acajcr wltf sovcrclig drrcdrs to prlvdtc hrc`ltors jc sujkcht to elgdghlgi

rcvlcws to jrlgi `cvcnopacgts to tfc dttcgtlog oe tfc Cxchutlvc Jodr`, provl`lgi dg

opportuglty eor tfc Jodr` to hogsl`cr wfctfcr d`cqudtc sdeciudr`s rcadlg lg pndhc eor eurtfcr

usc oe Eug` rcsourhcs lg tfc acajcrs hlrhuastdghcs.

Drrcdrs og Gogsovcrclig @cjt to Rrlvdtc Hrc`ltors

Drlslgi eroa tfc Laposltlog oe Cxhfdgic Hogtrons

Lg nlift oe rchcgt cvcgts, lt ls hncdr tfdt d guajcr oe hougtrlcs ady stlnn jc potcgtldnny

vungcrdjnc to elgdghldn adrmct `cvcnopacgts tfdt houn` ncd` to cxhcsslvc prcssurc og tfccxhfdgic rdtcs dg`/or rcscrvcs. Po dttcgudtc tfc d`vcrsc lapdht oe suhf prcssurc, tfc

sovcrclig alift jc eorhc` to prlorltlzc tfc usc oe eorclig cxhfdgic dg` ug`crtdmc dhtlogs to

fcnp dnncvldtc tfc hrlsls; tfdt ls, to laposc or lgtcgsley cxhfdgic hogtrons tfdt, lgtcr dnld, nlalt

tfc djlnlty oe tfc prlvdtc schtor to eunelnn hogtrdhtudn ojnlidtlogs to admc hcrtdlg `cjt pdyacgts

djrod`, wflhf woun` ncd` to tfc cacricghc oe gogsovcrclig drrcdrs.

Ds lg tfc sovcrclig hdsc, ncg`lgi lgto drrcdrs lg suhf hog`ltlogs uslgi tfc hrltcrld

d`optc` lg 4


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nohdn jdgms) to pdrtlhlpdtc lg `cjt rcoridglzdtlogs ls nlmcny to jc strcthfc` tflg. Lg suhf

hlrhuastdghcs, lt woun` jc `leelhunt to eora d ku`iacgt rcidr`lgi tfc tflr` hrltcrlog d`optc` lg

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imf policy on lending into arrears to private creditors

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