Excerpt
August 14, 2024, Paper: "The amount of debt relief that a sovereign borrower seeks from its commercial creditors in a debt workout will reflect a mountainous pile of assumptions about the likely state of the debtor country's economy in the future. If those assumptions prove to have been too optimistic (meaning that the future turns out to be bleaker than the architects of the debt restructuring predicted it would be), then another round of debt restructuring may be in the offing. But if the assumptions turn out to have been excessively pessimistic, the creditors will have given more debt relief than was actually necessary to restore the country to a sustainable footing. Clawing back some or all of that unwarranted generosity has been the province of "value recovery" features in sovereign debt restructurings."