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In finance, a holdout problem occurs when a bond issuer is in default or nears default, and launches an exchange offer in an attempt to restructure debt held by existing bond holders. Such exchange offers typically require the consent of holders of some minimum portion of the total outstanding debt, often in excess of 90%, because, unless the ...
During that process, the country must restructure the outstanding debt by offering its old bonds holders new instruments that reflect new financial terms. It is a process that sees the emergence of holdout creditors who refuse the proposed restructuring, posing a problem to the reorganization process the holdout problem. Therefore, the threat ...
The European debt crisis is a crisis affecting several eurozone countries since the end of 2009. [7] [8] Member states affected by this crisis were unable to repay their government debt or to bail out indebted financial institutions without the assistance of third-parties (namely the International Monetary Fund, European Commission, and the European Central Bank).
Most Americans carry debt, and that includes the high-interest that comes with credit cards. Total credit card balances rose 5.8% from a year ago, to $1.14 trillion, according to a recent Federal...
Rising government debt levels have seemingly always been in the headlines. In recent years, U.S. debt levels have become political, with one side of the aisle often refusing to raise the debt limit...
The national debt is finally a real-world problem. Rick Newman. October 30, 2023 at 4:23 PM. For years, budget hawks warned about the damaging effects of the mushrooming national debt, which now ...
The terms achieved under the deals indicate that debtors used the menu approach to reduce the cost of debt reduction. Furthermore, it reduced the holdout problem in which certain holders have an incentive not to participate in the restructuring in the hope of getting a better deal.
According to Gaspar, the problem could be especially acute in low-income countries, where constraints on public finances are “particularly severe.” “High and volatile interest rates make the ...