A renegociação da dívida brasileira de 1994: uma cura para a dívida pendente?

Abstract

There is an argument in the literature that open-market sovereign debt repurchases are not beneficial for the debtor country, even if they can alleviate debt overhang. This paper shows that debt buybacks can actually lead to a worsening of the debt overhang problem. This is possible if the real return on investment in the debtor country is sufficiently high, so that resources used to finance the buyback have a high opportunity cost, and the debt reduction is small compared to the amount of resources allocated to the repurchase. In1994 the Brazilian government restructured its external debt financing package as part of the Brady Plan initiative. The Brady Plan was an attempt for severely indebted countries to achieve a debt reduction at a price lower than the one through secondary market buybacks, and therefore retaining some of the (possible) efficiency gains. Using open-market buybacks as benchmark, bounds for possible gains from the deal are calculated, and an assessment is made in respect to whether the deal helped alleviating the debt overhang problem.