DEFAULT AND RESTRUCTURING AS POSSIBLE SCENARIOS FOR SETTLEMENT OF DEBT PROBLEMS

Abstract

The spread of debt problems in Ukraine and in the world necessitates the study of possible scenarios of actions of the borrower countries. In case of loss of solvency, countries can choose two ways: the first is based on a complete rejection of their own obligations, the second consists in reaching agreements with creditors. That is why the article examines default and restructuring as two possible scenarios available to states in a difficult debt situation. The purpose of the article is to substantiate the approaches to the selection of scenarios for settling the debt problems of the debtor countries. In order to achieve the goal, it is necessary to solve the following tasks: to deepen the theoretical approaches to determining the essence, types and scenarios of default and restructuring; to investigate the experience of restructuring in Ukraine; compare the scenario of default and restructuring as possible scenarios for settling debt problems. Available scenarios of the borrower's behavior in the market when solving debt problems should not be chosen in isolation, but should take into account a number of factors and threats to the growth of the public debt. Examples of default and restructuring that took place in the world are described. The high level of sensitivity to default, defined in the article, led to the study of the experience of the restructuring of the state debt of Ukraine in 2015. The types of default were considered and compared with restructuring in terms of the advantages and disadvantages of each according to the following criteria: change of loan status, reduction of the amount of debt, reduction of interest on the debt, change of the debt repayment term, reduction of the rating of the borrowing country, support for reforms aimed at restoring the financial stability, debt isolation of the borrowing country. The article is dominated by the idea of settling debt problems while maintaining access to the capital market and reaching agreements with creditors.