海外发展研究所-低收入发展中国家的私人借贷和债务风险（英文）-2020.6-48页_2mb

Summary of "Private Lending and Debt Risks of Low-Income Developing Countries"

Core Content

This report examines the growing reliance of low-income developing countries (LIDCs) on private sector financing through international bond markets, and evaluates the associated debt risks, particularly in the context of the coronavirus pandemic. It highlights how private borrowing has become a significant source of external debt for LIDCs, and how this trend is increasingly linked to global financial conditions.

Main Points

1. Debt Trends in LIDCs

• Debt Distress: The IMF classified 44% of LIDCs as in debt distress or at risk of it before the pandemic.
• Debt Composition: Public debt-to-GDP ratios have risen in 41 of 59 LIDCs. External debt has grown significantly, especially in countries that have issued sovereign bonds.
• Concessional Debt: Concessional debt has declined over time, from over 50% of LIDC external debt in the 2000s to 34% in 2018.
• Debt Service Burden: Debt service on external public and publicly guaranteed (PPG) debt has increased to about 2% of GDP and 13% of exports.

2. Private Borrowing and Global Liquidity

• Borrowing Costs: Average interest rates on international bonds are over 7%, with some reaching up to 10.75%.
• Global Liquidity Influence: Borrowing costs are correlated with global financial conditions. When global liquidity is low, LIDCs face higher borrowing costs.
• Bond Issuance Timing: Most bond issuances by LIDCs occurred during periods of global liquidity expansion, which made financing easier.

3. Future Risks

• Refinancing Challenges: LIDCs face significant refinancing risks due to the concentration of bond maturities. For example, major repayments are due in Honduras and Senegal in 2020 and 2021, with a spike expected in 2024.
• Debt Vulnerabilities: Countries with high levels of external debt (exceeding 12% of GDP) are particularly at risk. These include Côte d'Ivoire, Senegal, and Zambia.
• Legal Risks: Legal clauses in bond contracts, such as collective action clauses (CACs) and pari passu clauses, complicate debt restructuring. Most bonds now include CACs that allow creditors to block restructuring, and only a few still contain the problematic pari passu clause.
• Institutional Risks: The use of foreign law in bond contracts increases the likelihood that creditors' rights will be upheld in disputes, making debt restructuring more difficult.

4. Key Findings

• Global Liquidity Cycle: The availability and cost of financing for LIDCs are heavily influenced by the global liquidity cycle, which is driven by monetary policies in advanced economies and the risk appetite of global investors.
• Domestic vs. Global Factors: While domestic factors (e.g., inflation, economic growth) are still important, global factors have become a dominant influence on debt sustainability and borrowing costs.
• Need for Comprehensive Debt Restructuring: The report argues that current efforts by the IMF and G20 to provide limited debt service relief are insufficient. A comprehensive approach to debt restructuring, including private creditors, is necessary to avoid further crises.

Key Information

• Countries Studied: 16 LIDCs that issued international bonds between 2010 and 2019.
• Total Bond Issuances: 57 bond issuances, totaling $52 billion.
• Debt Sources: Private sector borrowing has overtaken commercial bank loans as the largest form of PPG debt for bond-issuing LIDCs.
• Legal Jurisdiction: 49 out of 55 bonds were governed by English law, with the remaining under New York state law.
• Global Liquidity Indicators: The report uses various indicators, including the Financial Conditions Index (FCI), the Chicago National Financial Conditions Index (NFCI), and the Financial Stress Index (FISI), to assess the impact of global liquidity on borrowing costs.

Conclusions

1. Global Financial Conditions Matter: The cost and availability of borrowing for LIDCs are closely tied to global liquidity, not just domestic conditions.
2. Private Borrowing Risks: The increasing reliance on private sector financing has introduced new vulnerabilities, particularly in terms of refinancing and legal restructuring.
3. Comprehensive Solutions Required: Debt relief and restructuring efforts must include private creditors to be effective, and standstills on all debt payments are needed to prevent further financial instability.

Recommendations

• Immediate Standstills: All debt payments should be paused to provide temporary relief.
• Comprehensive Restructuring: Debt restructuring should involve both public and private creditors to ensure fairness and sustainability.
• Policy Adjustments: Domestic contraction and fiscal consolidation may not address the key drivers of debt problems, which are global in nature.

Summary of Risks

• High Borrowing Costs: Average interest rates on international bonds are over 7%, with some reaching 10.75%.
• Refinancing Pressures: Large upcoming repayments in 2020-2021 and a significant spike in 2024 pose major challenges.
• Legal Barriers: Contractual clauses like CACs and pari passu make restructuring difficult and may benefit 'vulture funds'.
• Currency Risks: LIDCs' currencies are depreciating against hard currencies, increasing the cost of external debt.

Implications

• Policy Misalignment: Current domestic-focused debt management strategies may not address the root causes of debt distress.
• Need for Global Coordination: The report emphasizes the need for global cooperation and mechanisms to handle debt work-outs in a fair and rapid manner.

Data Sources

• World Bank International Debt Statistics (WB-IDS)
• IMF Data and Analysis
• Bond Prospectuses
• Global Liquidity Indicators (e.g., FCI, NFCI, OFR-FSI)

This report provides critical insights into the evolving debt landscape of LIDCs and underscores the importance of addressing global financial conditions in any debt policy response.