Sovereign debt reprofiling: Ukraine’s lesson for the IMF | FT Alphaville:
"The IMF’s proposals to change its policy on sovereign debt reprofiling have divided opinion, with FT Alphaville providing a debating platform between supporters (for example here and here) and sceptics including myself (for example here and here).
The proposals are motivated by the objective of providing a fund programme breathing space to work when it is unclear if debt is unsustainable.
The idea is that if debt falls into a grey area of uncertain sustainability, the fund would lend money. But in order not to use official loans to bail out private creditors, the sovereign could consider extending maturities on all private sector bonds falling due within the life of the programme. If the programme worked, bondholders would still be paid out, albeit around three years late. If it did not, a full-scale restructuring would need to be undertaken."
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