The Restructuring Process

This chapter goes into depth on the debt restructuring process itself, a topic which has not been covered in the literature in detail before. It gives a step-by-step outline of how restructurings take place, from deciding on the appropriate strategy, to determining which debt should be covered and in what way; to engagement with creditors in the negotiating process. It also covers one of the main structural problems in reaching an agreement with creditors—the collective action problem—and explores ways by which such problems can be overcome with both private creditors (collective action clauses, exit consents) and the official sector (the role of the Paris Club).