The Seniority Structure of Sovereign Debt

Christoph Trebesch, Matthias Schlegl and Mark Wright

No 13692, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Sovereign governments owe debt to many foreign creditors and can choose which creditors to favor when making payments. This paper documents the de facto seniority structure of sovereign debt using new data on defaults (missed payments or arrears) and creditor losses in debt restructuring (haircuts). We overturn conventional wisdom by showing that official bilateral (government-to-government) debt is junior, or at least not senior, to private sovereign debt such as bank loans and bonds. Private creditors are typically paid first and lose less than bilateral official creditors. We confirm that multilateral institutions like the IMF and World Bank are senior creditors.

Keywords: Sovereign default; Arrears; Insolvency; Priority; IMF; Official debt; Sovereign bonds; International financial architecture; Pecking order (search for similar items in EconPapers)
JEL-codes: F3 F4 F5 G1 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
https://cepr.org/publications/DP13692 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The seniority structure of sovereign debt (2019)
Working Paper: The Seniority Structure of Sovereign Debt (2019)
Working Paper: The Seniority Structure of Sovereign Debt (2019)
Working Paper: The seniority structure of sovereign debt (2019)
Working Paper: The Seniority Structure of Sovereign Debt (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13692

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP13692

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().