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LDC Borrowing with Default Risk
This paper presents a theoretical model to describe the effects of default risk on international lending to LDC sovereign borrowers. The threat of defaults in international lending is shown to give rise to many characteristics of the syndicated loan market: (1) quantity rationing of loans; (2) LDC policies designed to enhance creditworthiness; (3) prevalence of short maturities on international loans; and (4) a prevalence of bank lending relative to bond-market lending.
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Files
- w0925.pdf application/pdf 431 KB Download File
More About This Work
- Academic Units
- Earth Institute
- Publisher
- National Bureau of Economic Research
- Series
- NBER Working Paper, 925
- Published Here
- September 28, 2009
Notes
Published in Internationales Bankgeschäft, Kredit and Kapital special issue no. 8 (Berlin: Duncker & Humblot, 1985).