Latin America sovereign debt in times of COVID-19

The COVID-19 crisis is presenting significant challenges for Latin American countries to service their foreign sovereign debt.

For many countries in the Americas, COVID-19 has resulted in a balance of payments crisis as economies have slowed, export revenues have declined, and liquidity has dried up at the same time that social spending needs on health care have increased. The G-20 and International Monetary Fund have made strong statements for creditors leniency and debt relief programs.

In particular, Argentina faced a critical debt situation even prior to the onset of the COVID-19 crisis and formally defaulted last week, and Ecuador has announced a deal with a substantial number of bondholders to restructure all its debt. The loss of revenue caused by COVID-19 in areas such as tourism and remittances has affected Caribbean and Central American countries.

In this webinar, we addressed the political, economic, and legal challenges facing these countries as they confront the challenges of debt service and social needs.

The following topics were addressed in the webinar:

  • An overview of the sovereign debt panorama in the region
    • What are countries in difficult situations doing in this respect? Is the foreign debt sustainable?
  • Political considerations and social needs
  • Strategies and alternatives to avoid default
    • The Ministry of Finance perspective
    • Banker's point of view
    • IMF and multilaterals role
    • Legal strategies/restructuring
      • Liability management, consent solicitations, and exchange offers
      • Renegotiation of bilateral debt

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