'Secret' buy-backs of LDC debt

Cohen, Daniel and Verdier, Thierry (1995) 'Secret' buy-backs of LDC debt Journal of International Economics, 39, (3-4), pp. 317-334. (doi:10.1016/0022-1996(95)01372-9).


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We analyze the buy-back of its debt by an LDC. Contrary to previous analyses of this subject, we assume that the debtor can hide its transactions behind the veil of a fictitious operator: the banks, we assume, cannot discriminate intra-bank transactions from buy-backs by the debtor itself. With this assumption, the lenders set the price by (rationally) taking account of the country's incentive to repurchase its debt. Will the debtor undertake a buy-back of its debt? The answer is a qualified yes. Large buy-backs will take place.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1016/0022-1996(95)01372-9
ISSNs: 0022-1996 (print)
Keywords: buy-back, ldc debt
ePrint ID: 33465
Date :
Date Event
November 1995Published
Date Deposited: 14 Dec 2007
Last Modified: 16 Apr 2017 22:15
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/33465

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