This chapter details the transactional aspects of sovereign debt restructuring. The amount of accumulated debt and its progressive increase have led to repayment problems for some countries and, in some cases, resulted in default. Therefore, as countries amass unsustainable debt burdens (as happens when the ratio of debt to gross domestic product rises to such an extent that the application of policies cannot revert the situation), they have an increasing need to restructure their sovereign debt. Sovereign debt restructuring can be understood as the technique used by sovereign states to prevent or resolve financial and economic crises and to achieve debt sustainability levels. The IMF has reviewed its lending framework in the context of sovereign debt vulnerabilities. It is hoping to introduce greater flexibility and be able to provide exceptional access to funding on the base of a debt operation that involves an extension of maturities.
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