Sovereign debt default list has shrunk this year

Reuters

Sovereign debt default list has shrunk this year - Tellimer

2024 10월 17 일, 오전 8:37 GMT

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SOVEREIGN DEBT DEFAULT LIST HAS SHRUNK THIS YEAR - TELLIMER

The number of outstanding sovereign bond defaults across the world has fallen this year, according to Tellimer Research.

Chief economist & head of fixed income research Stuart Culverhouse said there have been no instances of defaults so far in 2024, something that has not happened since 2019.

Instead, three countries have exited default territory. Earlier this month, Ghana's government said investors had signed off on its proposal to restructure $13 billion worth of international bonds.

Back in June, Zambia's finance ministry had stated that holders of $3 billion of its international bonds had approved a debt restructuring proposal, while Ukraine's international bondholders approved the restructuring of over $20 billion of debt in August.

Including Ukraine, the number of outstanding sovereign bond defaults have fallen to six from nine at the end of last year, as per Tellimer calculations.

So far, nearly $40 billion of bonds have come out of default this year. However, a total of $116 billion of principal amount still remains in default. Lebanon, Venezuela, Belarus, Sri Lanka, Russia and Ethiopia have outstanding debt defaults so far this year.

Culverhouse notes that Ethiopia and Sri Lanka are the most likely candidates to emerge out of default in the future, though the timing for either remains uncertain.

Sri Lanka's new government, elected back in September, is expected to launch a formal offer of its $12.5 billion debt rework to bondholders by mid-November, two sources familiar with the matter told Reuters last week.

On the other hand, a group of Ethiopia's international bondholders had rejected the outlines of a government restructuring proposal for its $1 billion bond earlier this month.

(Shashwat Chauhan)

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