In this webinar, Aitor Erce, co-author of "Sovereign Debt Restructuring at Home and Abroad", will present the paper and provide a systematic comparison of sovereign defaults and restructurings that affect debt instruments issued under domestic- and foreign-laws.

Domestic-law defaults have become as frequent as foreign ones, though they remain smaller in size. Moreover, governments operate defaults at home and abroad selectively. Reflecting the law-advantage sovereigns have when dealing with domestic-law debt, the resolution of domestic default tends to come faster than that of foreign default but can also protract substantially. Still, pre-default and negotiated restructurings are equally likely during foreign and domestic debt restructuring. Both domestic- and foreign-law restructurings often imply extensions of maturities and amendments to the coupon structure. Notably, while face value reductions are rarer during domestic debt restructurings than during foreign ones, domestic defaults carry larger net-present-value losses for creditors.

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