Article 23. Rate of payment of creditors 96 98 21

Article 23. Rate of payment of creditors

Article 17 19 . Rate of payment of creditors 182 183 40

36. Africa s external debt burden is the highest among developing countries in terms of the ratio of external debt to GDP and its debt service ratio.

Article 24 The Company shall present the ending balance, beginning balance and percentage increase or decrease of the following financial status indicators asset liability ratio, net asset liability ratio and liquidity ratio in tabular form.

Article 75 The Company shall present the ending balance, beginning balance (prior year) and percentage increase or decrease of the following financial status indicators in tabular form asset liability ratio, net asset liability ratio and liquidity ratio.

Chapter VIII Definition of Financial Assets, Financial Liabilities and Equity Instruments

During the 1990s, large business groups of the Republic of Korea (chaebols) expanded quickly through financing from domestic banks, becoming highly leveraged (with an average debt to equity ratio of about 400 per cent in 1997).

Debt service ratio

However, because of improved economic performance in the debtor countries, the overall ratio of debt to exports and the ratio of external debt to gross domestic product had declined to their lowest levels since the onset of the debt crisis.

15. Currency exchange adjustments include losses and gains on transactions and translation losses and gains from revaluation of year end asset and liability balances, based on the United Nations operational rate of exchange.

Although Mexico s traditional debt indicators appeared sustainable, with moderate ratios of debt service, debt stock to exports and interest payments to exports (a ratio similar to the debt service ratio), the ratio of short term debt to reserves amounted to 131 per cent in 1997 (the ratio was much higher in 1996).

It is intended to ensure that a creditor, by participating in proceedings in more than one jurisdiction, does not receive a greater proportion of repayment of claims than that received by other creditors of the same class.

The liabilities were valued on the basis of a discount rate of 5.5 per cent.

In Germany, for example, interest rates on public debt up to five years will be negative, and only slightly positive beyond that, producing a weighted average of zero. Clearly, Japan s near zero interest rate environment is no longer unique.

Cleaning up high private sector debt and lowering public debt ratios by growth alone is particularly hard if a balance sheet crisis leads to an anemic recovery. And reducing debt ratios by saving more leads to the paradox of thrift too fast an increase in savings deepens the recession and makes debt ratios even worse.

Given that the assets and liabilities of the Fund are expressed in United States dollars, it is appropriate to develop the assumptions by reference to yields available on United States long term Government Bonds.

Debt rate as percentage GDNI

Region Debt export ratio

As percentage of projected liabilities

(c) At 31 December 1997, the ratio of current assets to current liabilities was 1.46 1, below the recommended level of 2 1

An additional criterion is a ratio of present value of debt to government revenue of 280 per cent (together with additional conditions related to a ratio of government revenue to gross domestic product (GDP) of 20 per cent and a ratio of exports to GDP of 40 per cent).

In UNHHSF, the ratio of current assets of 17.4 million to current liabilities of 12.0 million was 1.46 to 1.

The situation is all the more difficult since Africa s heavy debt burden has increased by 2.1 per cent compared to 1995, making Africa the continent with the highest debt to export ratio.

However, to trace these adequately requires more information, and on a more timely basis, on aggregated domestic stocks as well as flows (for example, levels of debt in corporate as well as banking sectors, private liquidity ratios and debt equity ratios, as well as borrowing flows).

(c) fair and efficient administration of cross border insolvencies that protects the interests of all creditors and other interested persons, including the debtor

Latin American debt indicators generally indicated a sustainable debt position for the region as a whole, with a debt service ratio of 12 per cent, debt stock to exports and to GNP ratios of 103 per cent and 43 per cent respectively, and a short term debt to reserves ratio of 71 per cent.

Debt rate ( GNP)

The personal debt to income ratio basically went from 65 percent to 135 percent in the span of about 15 years.

Article 58The equity instruments refers to the contracts which can prove that a certain enterprise holds the surplus equities of the assets after the deduction of all the debts.

quot (c) fair and efficient administration of cross border insolvencies that protects the interests of all creditors and other interested persons, including the debtor

As a group, those countries debt burden remains severe, with a debt stock to export ratio of well over 300 per cent (far above the 200 per cent threshold used to indicate a debt overhang) and a debt stock to GNP ratio of 127 per cent in 1996 after several years of improvement.

This implies a deceleration of the growth rate of public indebtedness.

(1)the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses, including transactional financial liabilities and the designated financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses and

The ratios of debt service to exports and debt stock to GNP also point towards an improved position.

In fact, Greece's official creditors have granted it long enough grace periods and low enough interest rates that the burden is bearable. Greece actually spends less on debt service than Italy or Ireland, both of which have much lower (gross) debt to GDP ratios.

Sub Saharan Africa and the least developed countries, for example, have the highest ratios of external debt to GNP and of external debt to exports.

Thus, a debt equity swap of less than 7.5 of the creditors investment would be enough to compensate for the banks losses. And, even if the banks private depositors, whose claims are 39 of the aggregate balance sheet, were excluded, the debt equity swap necessary to compensate for a loss of up to 100 of the equity would be less than 12 of the creditors investment volume.

213. Multilateral debt accounts for a high proportion of the external debt of a number of heavily indebted developing countries.

In particular, they should have paid greater attention to the sustainability of US mortgage and consumer debt. In 2007, the mortgage and consumer debt to GDP ratio was more than 90 , compared to 24 for net foreign debt.

Interest payments on the debt eventually become so burdensome that bondholders demand higher interest payments (Greek debt recently yielded over 30 ). Interest rates on US government debt remain low, so this threat is prospective, but future deficits will be far higher than government projections when rates normalize.

But governments and investors know this, and the result has been much higher debt to GDP ratios than would have been possible under the gold standard. The eurozone as a whole has a debt to GDP ratio of 90 , which is high by any standard.

Even if the Fed ignores deflationary pressure and hikes interest rates more quickly, medium and long term rates are still likely to be anchored, given how little yield is available elsewhere in the world. Yields on German Bunds are now negative out to eight years.

(b) the estimated long term rate of inflation used in computing the liability

(c) A preliminary estimate of the ratio factor (i.e., the ratio of ICITO termination liabilities to the total liabilities for all active Fund participants) would be prepared in December 1998 based on data collected through 31 December 1997, and made available to ICITO.