Template-Type: ReDIF-Paper 1.0
Title: Default-risky Sovereign Debt 
Author-Name: Andreas Wiggers
Author-Email: 
Classification-JEL: G15, G33, F34, H63
Keywords: Credit risk, sovereign debt, endogenous default 
Abstract: Not only corporate but also sovereign debtors, in particular developing countries, may get into financial difficulties. Contrary to corporate issuers, they decide 
	themselves if they continue to fulfill their debt obligations or convert their debt. I analyze the value of a default-risky sovereign bond in a setting in which foreign 
	trade is reduced in case the country does not fulfill its obligations. Comparing the costs of debt service with the value of the punishment via foreign trade, the 
	country voluntarily decides when to reorganize its debt. Knowing this threshold the value of a sovereign coupon-bond can be calculated. 
Note: 
Length: 23
Creation-Date: 2002-11	
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse36_2002.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse36_2002