Risk Management For External Finance- Tarun Das

Risk Management for Corporate External Finance Policies, Systems and International Best Practices Prof. Tarun Das1, Ph.D. 10/14 First Floor East Patel Nagar New Delhi-110008 Tel: 2588-4540 Mob: 9818024569 EMAIL: [email protected]

Statement It is hereby certified that the attached paper along with abstract represents my original and unpublished work.

(Tarun Das) Dated the 9th May 2008

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Individual Consultant. Presently working as ADB Strategic Planning Expert for the Government of Mongolia on leave of absence from the post of Professor (Public Policy), Institute of Integrated Learning in Management, New Delhi, India. Earlier, Dr. Das worked as Economic Adviser in the Ministry of Finance and Adviser (Transport Modeling and Policy Planning) in the Planning Commission, Government of India. For any clarifications contact [email protected]

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Risk Management for Corporate External Finance Policies, Systems and International Best Practices Abstract The paper starts with an appraisal of relative merits and demerits of alternative sources of corporate sector external finance (viz. syndicated bank lending, bond lending, market derivatives, Foreign Direct Investment, portfolio investment, and quasi equity investments) in terms of expected financing cost, degree of risk-sharing and extent of managerial participation in a corporate body. Then it identifies various types of risk (such as market based risks, country specific and political risks, and operational, management and system risks) and debt sustainability indictors and presents international best practices for risk management techniques, policies and systems. It also discusses types and determinants of debt distress and standard models such as stress tests for assessment of risk. Some corporate members may think that having such a comprehensive system and policies for risk management as suggested in the paper would be very expensive. But, not having one might be more expensive for a corporate body. 1. Alternative modes of external finance There has been a significant change in the structure of private capital flows to the developing countries over the years. Until the middle of 1980s, bank lending was the major mode of foreign private flow to the Asian developing countries. Subsequently, the relative importance of bank lending has declined and that of other modes has increased. The share of foreign direct investment (FDI) has increased the most followed by bond lending and foreign portfolio investment. The major alternatives to syndicated bank lending are discussed below: (a) Bond Lending This type of lending has flourished in recent years. International bond markets have two components: Eurobond and foreign bond markets. Eurobonds are underwritten by an international group of banks and are issued in several different national markets simultaneously. They are not subject to formal controls. Foreign bond markets are simply domestic bond markets to which foreign borrowers are permitted to access. (b) Financing through New Instruments In recent years a plethora of new instruments and modes has emerged in the international financial system. Most of these are hybrid instruments between bonds and bank lending. Some seek to achieve continued access to bank lending (such as note-issuance facilities and transferable loan instruments), and others seek to expand the use of international

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capital markets (such as floating rate notes). New modalities for conducting international financial intermediation (such as interest and exchange rate swaps and options and networks such as CHIPS and GLOBEX) have also emerged. (c) Foreign Direct Investment (FDI) This is the traditional alternative to sovereign borrowing and entitles the investor to a share of the distributed profits of a firm. The parent firm is typically motivated by the return it expects to earn by making use of its existing know-how in a local operation and/or by incorporating the local operation in its global production and marketing network. FDI facilitates global integration, industrial diversification, privatization, infrastructure development, technology upgradation, and acts as an engine of external trade and overall growth. (d) Foreign Portfolio Investment in Equities Like FDI, foreign portfolio investment in equity entitles the investor to a share in the profits of a private enterprise. Unlike the direct investor, however, the equity investor typically seeks only a share of profits and appreciation of capital in the stock market, and is not interested either in ownership or management of the company, and so it does share the responsibilities and risk of business. Indeed, many equity investors deliberately restrict their holdings to a small percentage of the total stock in order to maintain liquidity and avoid being forced to take responsibility. Portfolio equity investment involves varying degrees of penetration of the domestic economy. The least penetrating mode, popular in many developing countries, is the offshore investment trust that is invested in a broadly diversified portfolio of domestic shares. Other more penetrating modes involve investments in individual shares; either through offshore listings of developing country firms or purchases of locally listed shares. (e) Foreign Quasi-Equity Investments A foreign quasi-equity investment opens the package of a risk-sharing and managerial control. These new forms of inter-national investment include joint ventures, licensing agreements, franchising, management contracts, turnkey contracts, production sharing and international subcontracting. Appraisal of relative merits and demerits While bond lending and lending through new instruments together with syndicated bank lending are forms of general obligation finance in the sense that the lender provides money to be repaid on terms independent of the success of investment made with the funds, financing by other alternatives (i.e., FDI, foreign portfolio investment and foreign quasi-equity investment) involves risk-sharing and responsibility sharing. For example, under FDI an investor is entitled to a share of the distributed profits of a firm and an investor also shares in the responsibility of managing the firm. Portfolio investment is similar, except that it does not encompass sharing management responsibility.

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The five alternatives to bank lending can be assessed in terms of expected cost, degree of risk-sharing and degree of managerial participation in the project (Table-1). The major advantages of foreign direct investment, foreign portfolio investment and foreign quasiequity investment are that they involve risk sharing, sharing of managerial responsibilities and the promotion of a more efficient use of resources. Foreign portfolio investment, in addition, has a favorable impact on local capital markets. As judged by these criteria, FDI appears to be a preferred mode of external finance. Unlike other capital flows, FDI is a package that embodies capital along with technology and managerial, marketing and technical skills. Presence of multinationals promotes greater efficiency and dynamism in the domestic sector and widens external trade. Training gained by local employees and their exposure to modern organizational system and international best practices are valuable assets for the host country. The disadvantages are that there might be misuse of control and that foreign direct investment might introduce inappropriate technology. Table-1: Alternatives to Bank Lending Modes of capital transfer (1) 1. Bank lending 2. Bond Lending 3. Market derivatives 4. Foreign Direct Investment 5. Foreign Portfolio Equity 6. Quasi-Equity Investment

Expected Cost

Risk-sharing

(2) High Medium Medium Low Medium Medium

(3) Low Low Medium High Low High

Management Sharing (4) Low Low Low High Low Medium

2. Liquidity versus Solvency One important conceptual issue relates to the distinction between debt service problems due to liquidity crunch and those due to insolvency. Liquidity crunch means that cash receipts fall short of cash payments obligations. If a firm has positive net worth but faces difficulty to meet the obligations of debt service, it is considered to be solvent but to have liquidity problem. When it has negative net worth, it is insolvent. Sound risk management requires different approaches for the public, financial, and corporate sectors. There is difficulty to apply concepts of corporate insolvency at a macro level to a country, as it is difficult to value all the assets of a country such as natural resources, wild life, antics in museum, heritage buildings and monuments. Besides, firms can disappear or can be taken over by lenders or merged with other corporate bodies in the case of insolvency problems. But, a country cannot become bankrupt nor disappear nor are overtaken or merged with other countries purely on account of financial problems. So we need to consider medium and long-term prospects of a country in terms of economic growth and balance of payments.

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3. External debt and risk management systems and policies Any corporate body should manage its debt in such a way that the required amount of financial resources is raised at the lowest possible medium and long-term cost and with a prudent degree of risk. Poor external debt management poses risks for both the company and the country. Risks include foreign exchange and financial crisis; change in creditworthiness and insolvency (‘debt distress’); leading to economic crisis and social instability (as in the case of East Asian crisis in 1997-1999). Any company should have a risk management framework that identifies and assesses the financial and operational risks for the management of external debt. (a) Desirable systems for debt and risk management A corporate house with large shares of external debt must set up an effective debt management system consisting of the following: have independent (i)Independent Front offices, which are responsible for negotiating new loans. (ii)Back office, which is responsible for auditing, accounting, data consolidation and the dealing office functions for debt servicing. (iii) (iv)Middle office, which is responsible for identification, assessment, measurement and monitoring of debt and risk, dissemination of data and policy formulation for both short and medium term, and setting benchmarks for debt composition and currency-interest rate- maturity mix. (vi)Head Office, which accords final approval for both internal and external debt. (b) Transparency in Risk Management Debt management objectives should be clearly defined, documented and disclosed at all levels dealing with debt. The adopted measures of cost and risk should be explained. Preferred policies and measures for debt management should be clearly indicated by the corporate office. Equally important are the rules, regulations, institutional and legal framework for debt management. Some may feel that having such a comprehensive debt management system will be expensive, but not having one may be more expensive (c) Basic Principles of Risk Management Risks in the structure and composition of total debt should be carefully monitored and evaluated. Special attention may be given to risks associated with external and short-term or floating rate debt due to exchange rate fluctuations. Risks may be mitigated to the extent feasible by modifying the debt structure and taking into account cost of doing so. (d) Risk Management Framework

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A risk management framework should help to identify and manage the trade-offs between expected cost and risk in the debt portfolio. Cost includes financial cost of raising capital and potential cost of business loss. Market risk is measured in terms of potential increases in debt servicing costs associated with changes in interest or exchange rates. (d) Assessment of Risk There are various models for assessment of risk: • To conduct stress tests/ scenario analysis of the debt portfolio based on economic and financial shocks. • Simple scenario models used by the World Bank and IMF. • Project future debt services over medium and long term under different scenario. • List key risk indicators over time. • Summarize costs and risks of alternative strategies, policies and debt portfolio 4. Types of Risk Risks can be grouped in the following seven broad heads viz. A. Market-Based Risks a) Interest rate risks b) Currency risk c) Convertibility risk B. Liquidity Risk C. Credit Risk D. Refunding or Roll-over Risk E. Balance Sheet and Off Balance Sheet Risk F. Country specific and political risk a) Appropriation of capital, b) Nationalization of companies, c) No repatriation of capital and profits d) No sovereign guarantee e) Change of policy regime/ political economy G. Operational and systems risks a) Control system failure risks b) Financial error risk c) Auditing and Accounting risk d) Book keeping and Monitoring Risk Box-1 provides a brief discussion the nature and implications of these risks.

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Box-1. Risks for External Debt A. Market-Based Risks Risk associated with changes in the value of the debt service costs arising from the movements in market prices such as interest rates or exchange rates or commodity prices. (A1) Interest rate risks. While fixed interest rate has the advantage of having fixed obligations of interest payments over time, there may be a substantial loss in a regime of falling interest rates and global trends of soft interest rates. Solution lies to have a proper mix of variable and fixed interest rates. Losses may also arise on assets from variations in market yields that reduce the value of marketable investments below their acquisition cost. Losses may also arise from operations involving derivative financial instruments. (A2) Currency risk. Some element of currency risk is unavoidable with external debt. But, the currency composition of debt can have significant impact on debt services. If external debt is denominated in a few currencies in anticipation of favorable exchange rates, subsequent adverse exchange rate movements may lead to large losses. Debt servicing of domestic debt is not affected by exchange rate fluctuations, but debt burden of foreign currency loan increases if the exchange rate depreciates. The balance sheet effects of a depreciating exchange rate vary with the extent of foreign currency debt and its currency composition. If sharp changes occur in the exchange rates in which debt is denominated, but these are not offset by similar changes on the inflow side (for example, in exports), significant income effects can result. (A3) Convertibility risk: Easy convertibility of domestic currency on the capital account may lead to flight of capital at the slight anticipation of any crisis. B. Liquidity Risk There are two types of “liquidity risk.'“ One refers to the cost or penalty investors face in trying to exit a position when the number of transactors has markedly decreased or because of the lack of depth of a particular market. The other form of liquidity risk, for a borrower, refers to a situation where the volume of liquid assets can diminish quickly in the face of unanticipated cash flow obligations and/or a possible difficulty in raising cash through borrowing in a short period of time. C. Credit risk The risk of non-performance by borrowers on loans or other financial assets or by a counter-party on financial contracts. This is very relevant in the case of making the new public issues. Thus, lliquidity problem arises due to shortage of liquid finance for debt

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servicing, while credit risk arises when money raised through external finance is on-lent in activities having either low return or long gestation period or defaults leading to increase of non-performing assets. East Asian economic crisis during 1997-1998 is the best example of liquidity and credit risk of external debt (Tarun Das 1999a). Long years of sustained high growth and export earnings in the East Asian countries led to surge of foreign capital inflows leading to an over-extension of lending, decline in assets quality and laxity in risk evaluation. One of the major factors leading to East Asian financial crisis was that short-term external borrowing was invested in protected or illiquid sectors having low return and long gestation period (real estate and petrochemicals in Indonesia, Thailand, Malaysia), sectors with high or excess capacity having low or negative returns (steel, ship buildings, semiconductors, automobiles in Korea), non-tradable (such as land, office blocks and condominiums in Thailand) that generated return in domestic currency and did not generate foreign exchange; in automobiles and electronics with inadequate attention to profitability, and speculative and unproductive lending in share markets adversely affected by boom, bubbles and ultimately bust of share prices. All these created liquidity problem due to maturity mismatch between assets and liabilities of the commercial banks. D. Non-funding or roll-over risk The risk that debt will have to be refinanced or rolled over at an unusually high cost, or in extreme cases that it cannot be rolled over at all due to investor resistance. Solution is that the future borrowing should be geared to the company’s capacity to carry debt. If the company’s present debt service ratios are already high and it needs more resources, these should be in the form of non-debt creating financial flows (FDI and portfolio equity). A corporate body may undertake scenario approach and stress testing. Some companies may feel that the stress testing solutions are too extreme and may not want to tailor borrowing strategy to these. Other may consider these to be too benign and may miss important risks. Getting it right is important ...but not easy! E. Balance sheet and off balance sheet risk (E1) Balance sheet risk arises from unanticipated shortfalls in revenues or expenditure overruns due to fluctuations of market prices of goods and services. A business house should consider both balance sheet and off-balance sheet liabilities and try to minimize contingent liabilities, which may represent a significant balance sheet risk and a potential source of future financial imbalances. (E2) Off Balance Sheet Risk or Contingent Liabilities Risk Contingent liabilities are not direct liabilities but are contingent upon happenings of unanticipated events. Sound risk management policy requires that a company should

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consider and monitor off balance sheet liabilities, and try to minimize contingent liabilities. It will be prudent to establish clear criteria for use of guarantees and to use them sparingly. Experience in the industrialized countries suggests that more complete disclosure, better risk sharing arrangements, improved corporate governance and sound auditing principles can lead to substantial reductions of contingent liabilities. (A8) Roll over risk means problem of refinancing or rolling over past loans. F. Country specific and political risks These risks arise due to change of political regime with different ideology and policies. Political economy influences multinational companies’ choice between exports and investments, and act as deterrents for foreign capital, whereas scale economies, lower wages, fiscal incentives, high yields, trade openness and agglomeration effects stimulate non-debt creating financial flows. Foreign capital is attracted by countries, which allow free repatriation of capital and profits, and donot resort to appropriation or nationalization of private capital in public interest. G. Operational, Management and Systems Risks: These include a wide range of risks including transaction errors; failures in internal controls or systems or services; reputation risk; legal risk; security breaches; or natural disasters that affect business activity. (G1) Operational Risk is the risk that arises from improper management systems resulting in financial loss. It is due to improper back office functions including inadequate book keeping and maintenance of records, lack of basic internal controls, inexperienced personnel, and computer failures. Probability of default is high with inadequate operational and management systems. (G2) Control system failure risks arise due to outright fraud and money laundering because of weak or missing control procedures, inadequate skills, and poor separation of duties or lack of Chinese walls between front, back and middle offices for debt management. (G3) Financial error risk. Incorrect measurement and accounting of liabilities and assets may lead to large and unintended risks and losses.

5. Policies for Risk Management Market risk management involves understanding financial characteristics of revenues and matching these with liabilities with similar characteristics as far as possible (“asset and liability management”). This is feasible in countries with well-developed debt and bond markets. Credit risk management depends on diversification of lending and limited exposure to sectors with high risk or illiquidity. Rollover risk can be minimized by

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avoidance of excessive short-term or floating rate debt. Effective cash management is also necessary for effective risk management. Although there is no unique solution to tackle various types of risk, general risk management practices aim at minimizing risk for cost overruns or revenue shortfalls. These include development of ideal benchmarks for external debt and monitor and manage credit risk exposures. Typical risk management policies are given in Table-1. Table-2 Policies for Risk Management Type of Risk 1. Liquidity risk

2. Interest rate risk

3. Credit risk

4. Currency risk

Risk Management Policies (a) Monitor debt by residual maturity (b) Monitor cash balance and flows (c) Maintain certain minimum level of cash balance for contingencies (d) Maintain access to short-term borrowing (e) But, fix limits on short-term debt (f) Pre-finance maturing debt well in time (g) Do not negotiate for huge bullet loans (h) Smooth the maturity profile to avoid bunching of debt services (i) Develop liquidity benchmarks for each currency of debt (j) Fix benchmark for the ratio of fixed interest rate versus floating interest rate debt (k) Fix benchmark for the ratio of short-term and long-term debt (l) Fix benchmarks for the ratios of domestic debt and external debt (m) Fix benchmark for currency mix for external debt (n) Set benchmarks for single currency and currency pool debt (o) Use currency swaps (p) Use interest rate swaps (q) Have credit rating by a major credit rating organization such as S&P’s, Moody’s, and Japan Bond Research Institute etc. (r) Identify key factors that determine credit rating. (s) Develop a culture of co-operation and consultation among creditors, debtors and with credit rating organizations (t) Fix benchmarks for the ratios of domestic debt and external debt (u) Fix benchmarks for ratios of short-term and long-term debt (v) Fix benchmark for currency mix for external debt (w) Set benchmarks for single currency and currency pool debt (x) Use currency swaps (y) Try to have natural hedge by linking dominant currency of exports of goods and services to the currency of external debt

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5. Convertibility risk

6. Balance Risk

(z) Have priority for non-debt creating financial flows (FDI/portfolio) (aa) Followed by long-term commercial loans. (bb) Short-term borrowing mainly for trade credits/ debt servicing.

sheet (cc) Enforce strict financial discipline (dd) Fix targets on revenues and profits (ee) Establish profit centers and have hard budget constraints for all. (ff) Put limits on debt outstanding and annual borrowing as a percentage of turnover or profits (gg) Use guarantees and other contingent liabilities (such as insurance, pensions, provident funds) judiciously and sparingly. (hh) Fix limits on contingent liabilities (ii) Fix limits on short term borrowing (jj) Monitor debt service payments

7. Operational risks

(kk) Have stable and sound corporate, business and personnel policies, and prepare a paper on corporate vision (ll) Maintain co-operation with monetary and fiscal authorities (mm) Allow independence and transparency of different offices (such as front office, back office, middle office and head offices) dealing with both domestic and external debt (nn) Strengthen capability of different offices through proper selection, training and succession plan for officers (oo) Develop a culture of good corporate governance (pp) Strengthen book keeping, auditing, accounting systems/ principles

8. Country specific (qq) Have business with countries with stable/sound economic and political risk policies (rr) Have regular interaction with monetary and fiscal authorities (ss) Also maintain good relations with dominant political parties (tt) Join associations or chambers of commerce and industry. 6. Debt Sustainability Indicators Debt sustainability indicators are the most widely used ratios for debt management. These indicators express outstanding external debt and debt services as a percentage of gross domestic product or other variables indicating the strength of the economy. Some commonly used debt sustainability indicators are given in Table-3. Table-3: Debt Sustainability Indicators for the Corporate Sector

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Purpose 1. Solvency ratios

Indicators Debt service ratio–(amortization+ interest)/ revenue ratio External debt / assets ratio External debt / exports of goods and services (XGS) ratio External debt / revenue ratio PV of debt services/ assets ratio PV of debt services / exports of goods and services ratio PV of debt services / revenue ratio 2. Liquidity Cash-flow ratio for total debt or the total debt service monitoring ratios ratio (i.e. total debt services to XGS or revenues ratio) (i) Interest payments to reserves ratio (j) Ratio of short-term debt to exports of goods and services (or revenues) (k) Import cover ratio- Ratio of total imports to total foreign exchange earnings (or revenues) (l) Short-term debt to total debt ratio 3. Debt burden ratio (m) Total external debt to assets ratio (n) Total external debt to XGS ratio (o) Total external debt to revenues ratio (p) Debt services to assets ratio (q) Debt services to XGS ratio (r) Debt services to revenues ratio (s) Leverage- ratio of debt to equity 4. Debt structure (t) Rollover ratio- Amortization/ total disbursements ratio indicators (u) Ratio of interest payments to total debt services (v) Ratio of short-term debt to total debt (w) Ratio of external debt to domestic debt (x) Ratio of fixed interest to flexible interest rate (y) Maturity structure of debt (z) Currency composition of debt (aa) Interest mix of debt 5. Dynamic ratios (bb) Average interest rate/ growth rate of exports (cc) Average interest rate/ GR of assets (dd) Average interest rate/ GR of revenues Source: Raj Kumar (1999), IMF (2003) and Tarun Das (2006a) (a) (b) (c) (d) (e) (f) (g) (h)

7. Stress Tests to Assessment of Risk

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Stress tests for assessment of risks are closely related to the debt sustainability indicators and are useful in identifying major liquidity risks, as well as strategies to mitigate them. Stress tests can be used to test a variety of scenarios such as the following: (a) Types of capital inflows (FDI, trade credit, other credits) (b) Periods of access to capital markets (c) Exchange rate changes/ derivative positions (d) Risks due to price and interest rate changes (e) Macroeconomic uncertainties (such as outlook for exports and imports) (f) Policy uncertainties (fiscal and monetary policies) (a) Standard Stress Tests (i)Revenue growth = Baseline GR – 1 SD (ii)Export value growth = Baseline GR – 1 SD (iii)Assets value growth = Baseline GR – 1 SD (iv)Inflation rate = Baseline Rate + 1 SD (v)Net non-debt creating flows = Baseline Inflows – 1 SD (vi)One-time major nominal or real exchange rate depreciation = Baseline + ½ SD Where GR stands for growth rate and SD for Standard Deviation2 of a variable. (b) Indications of debt distress episodes Debt distress indicated by recourse to any of the following forms of exceptional finance: (i) Arrears: Number of years in which principal and interest arrears to all creditors is in excess of 5% of total debt outstanding. (ii) Debt rescheduling: Year of initial debt restructuring plus two subsequent years. (iii) Bailout by financial institutes and (iv) Normal times are non-overlapping periods of five years in which no signs of above mentioned debt distress are observed. (c) Determinants of debt distress A. Traditional Debt Indicators (i) Present value of debt/exports ratio (ii) Present value of debt/revenues ratio (iii) Present value of debt/assets ratio (iv) Debt service/exports ratio (v) Debt service/revenues ratio (vi) Debt service/assets ratio B. Indicators of Shocks (i) Real revenue growth 2

If X1, X2 …..Xn be n observations of any variable Xi (i=1, 2 ….. n) then µ = Σ Xi is the arithmetic mean of X; VAR = Σ (Xi - µ)² /n is the Variance of X; SD = √ VAR is the Standard Deviation of X, and CV = 100 SD/ µ is the coefficient of variation of X.

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(ii) Real depreciations (iii) Assets value growth (d) Quality of institutions and policies 1. There will be substantial value-added in looking at role of organizational quality, good governance, and shocks in addition to traditional debt burden indicators when assessing probability of debt distress. 2. Using a common debt-burden threshold to assess sustainability for all companies is unlikely to be appropriate. 3. There is a strong tradeoffs between quality of institutions, policies, systems of auditing and sustainable level of debt On the basis of experiences of several countries, World Bank has determined thresholds for various debt indicators for a country depending on the quality of its debt management policies and systems. These indicators are presented in Table-3. For example, if a country’s debt management policies and systems are considered to be poor, then the ratio of net present value of debt to total assets for the country should not exceed 30 percent. The NPV debt/ assets ratio can go up to 45 percent for a country having medium quality for debt management system, while the ratio can go up further to 60 percent for a country having a strong and very efficient system for debt management policies and systems. Other thresholds have similar interpretations. Table-3: Indicative Debt and Debt-Service Thresholds (%) Quality of Debt Management Policies and Systems Indicators (%) ⇓ NPV debt/ assets ratio NPV debt/ XGS ratio NPV debt/ Revenue ratio Debt service/ XGS ratio Debt svc/Revenue

Poor

Medium

Strong

30 100 200 15 20

45 200 275 25 30

60 300 350 35 40

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(e) Debt Distress Classifications • • • •

Low risk— all indicators well below thresholds Moderate risk—baseline OK, but scenarios/shocks exceed thresholds High risk—baseline in breach of thresholds In debt distress—current breach, that is sustained over projection period

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Selected References Das, Tarun (1999a) East Asian Economic Crisis and Lessons for External Debt Management, pp.77-95, in External Debt Management, ed. by A. Vasudevan, April 1999, RBI, India. Das, Tarun (1999b) Fiscal Policies for Managing External Capital Flows, pp. 194-207, in Corporate External Debt Management, ed. Jawahar Mulraj, Dec. 1999, CRISIL, Bombay. Das, Tarun (2000) Sovereign Debt Management in India, pp.561-579, in Sovereign Debt Management Forum: Compilation of Presentations, Nov. 2000, World Bank, Washington D.C. Das, Tarun (2002a) Implications of Globalization on Industrial Diversification in Asia, pp.ix+186, UN Publications Sales No.E.02.II.F.52, March 2002, UN-ESCAP, Bangkok. Das, Tarun (2002b) Management of Contingent Liabilities in Philippines- Policies, Processes, Legal Framework and Institutions, pp.1-60, March 2002, World Bank, Washington D.C. Das, Tarun, Raj Kumar, Anil. Bisen and M.R. Nair (2002) Contingent Liability ManagementA Case Study on India, pp.1-84, Commonwealth Secretariat, London Das, Tarun (2003) Management of Public Debt in India, pp.85-110, in Guidelines for Public Debt Management: Accompanying Document, 2003, IMF and the World Bank, Washington. Das, Tarun (2005) International Cooperation Behind National Borders- A Case Study for India, pp.1-50, Office of Development Studies, UNDP, UN Plaza, New York, 2005. Das, Tarun (2006a) Management of External Debt: International Experiences and Best Practices, pp.1-46, Best Practices series No.9, UNITAR, Geneva, January 2006. Das, Tarun (2006b) Governance of Public Debt- International Experiences and Best Practices, pp.1-23, Best Practices series No.10, UNITAR, Geneva, 2006. Das, Tarun (2008) Ex-Ante Financial Planning Methodology and Policies - Part-1: Methodology, pp.1-34, and Part-2: Policies, pp.1-32, ADB Capacity Building Project on Governance Reforms, Ministry of Finance, Government of Mongolia, Jan 2008. UN-ESCAP 2006) Manuel of Effective Debt Management, pp.1-104, UN, New York. IMF (2003) External Debt Statistics- Guide for Compilers and Users, 2003, Washington D.C. IMF And the World Bank (2003) Guidelines for Public Debt Management: Accompanying Document and Selected Case Studies, 2003, Washington D.C. Raj Kumar (1999) Debt Sustainability Issues- New Challenges for Liberalizing Economies, pp.53-76, in External Debt Management, ed. A. Vasudevan, April 1999, RBI, Mumbai, India. Reserve Bank of India (RBI) (1999) External Debt Management- Issues, Lessons and Preventive Measures, pp.1-372, edited by A. Vasudevan, RBI, Mumbai, April 1999. World Bank (2000) Sovereign Debt Management Forum: Compilation of Presentations, November 2000, World Bank, Washington D.C.

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