The Key IMF Policies in Sovereign Debt Restructuring

▪ In post-default cases the IMF’s arrears policies apply.

▪ Arrears policies differ depending on whether claim is held by a private creditor, an official bilateral creditor or an international financial institution, and defines conditions under which the IMF can lend despite arrears.

Arrears Policies

► Lend into Arrears to private creditors (LIA policy) – good faith efforts

► Lending into arrears to official bilateral creditors (LIOA policy) – representative Paris Club agreement, creditor consent or applying three criteria (need, good faith, no undue effect on ability to mobilize official financing in future)

► Non-toleration of Arrears (NTP) – arrears to all IFIs in non-OSI cases, and in OSI cases, judgement based on factors

▪ When arrears policies apply, a financing assurances review is necessary at each program review.

The views expressed herein are those of the presenter and should not be attributed to the IMF, its Executive Board, or its management