Sovereign debt restructuring does not hamper returns long-term – IMF paper
Investors who sell during crises fare much worse than those who buy and hold
Sovereign debt restructurings in emerging countries do not hamper long-term returns, says research published by the International Monetary Fund.
In Long-Term Returns in Distressed Sovereign Bond Markets: How Did Investors Fare? Jochen Andritzky and Julian Schumacher analyse the performance of sovereign bonds during 32 crises since 1998.
“We show that the average excess return over risk-free rates in crises with debt restructuring is not significantly lower than the return on bonds in crises
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