The determinants of the duration of commercial bank debt renegotiation for sovereigns

This paper examines the duration of commercial bank debt reschedulings for sovereigns. We show that the length of the first part of the rescheduling process, in which major creditor banks and the debtor country participate, is significantly affected by only the scale of rescheduling. However, the length of the second part of the process, where all the creditor banks in the syndicate are involved, is significantly affected by maturity, debt/GNP, debt/exports, GNP growth during the renegotiation process, and the presence of exit bonds and early participation fees. We also find that the time elapsed significantly increases the instantaneous probability of completion of the first part of the process.