Latest news with #debtSwaps
Bloomberg
03-07-2025
- Business
- Bloomberg
Distressed Debt Swaps Are Mostly Costly Failures, HPS's Puri Says
Troubled companies are failing to stay afloat by forcing losses on investors through debt swaps, proving such deals don't work, according to HPS Investment Partners. 'There's a lot of money and fees going out the door and there's a lot of brain damage and creditors and recovery rates have been totally demolished and it didn't work anyway,' Purnima Puri, head of liquid credit and a governing partner at HPS, said on the Bloomberg Intelligence Credit Edge podcast Thursday.
Reuters
01-07-2025
- Business
- Reuters
Spain, World Bank launch debt-swap hub to free development funds
LONDON, July 1 (Reuters) - Spain has partnered with the World Bank to help countries free up money to spend on sustainable development projects via debt swaps, the country's Ministry of Economy said on Tuesday. With rich governments cutting official development aid and many countries spending more on servicing debt than on development, nations are turning to creative ways to find cash to support projects ranging from protecting coral reefs to paying for water sanitation projects and schools. The Global Hub for Debt Swaps for Development, launched at the Finance for Development summit in Seville, southern Spain, will provide countries with technical and financial assistance as they look to reallocate finance to projects like food security and climate adaptation, the Spanish government said. Countries from Barbados to the Ivory Coast have used debt-swap mechanisms over the last year to buy back more expensive loans or bonds and refinance them at cheaper rates, while pledging to use the savings for social and environmental projects. But critics say such deals can be time-consuming, costly and hard to replicate, which has prevented more widespread adoption of a tool advocates say is critical to helping countries reduce debt burdens and address development issues. "We have heard loud and clear the message from many countries: we need practical tools that make debt swaps simpler, faster, and more accessible," Spain's Minister of Economy, Trade, and Business Carlos Cuerpo said. Spain will contribute 3 million euros ($3.54 million) to support the Hub, while the World Bank said it will host a "multi-partner trust fund to finance technical assistance". "By turning successful pilot projects into repeatable solutions, we can ease debt burdens and unlock investments in education, health, and opportunity," World Bank Group President Ajay Banga said. In the last two decades, Spain has signed 47 agreements with 28 countries, resulting in the forgiveness of 1.64 billion euros of debt. The government has put in place a new national framework to sign bilateral debt swap agreements totaling up to 300 million euros over the next five years, the Economy Ministry said. ($1 = 0.8470 euros)
