Statistical Terms Glossary

See debt-debt swap.

Debt swaps refer to the exchange of debt, in the form of a loan or, more typically, of securities other than shares, for a new debt contract (i.e., debt-debt swap) or the exchange of debt for equity shares (i.e., debt-equity swap).
Debt swaps often call for writing down, or discounting, the value of the original debt instrument before the conversion to new debt or equity. Any holding loss from writing down the value of the original debt is recorded in the revaluation account

Bond warrant, giving an investor the right to buy additional bonds at a predetermined price/yield.

The process of working out a satisfactory method whereby the debtor country can repay external debt, including restructuring, adjustment, and the provision of new money.

A swap whereby a multinational company with subsidiaries in the borrower country buys on lendable loans and subsequently extends this loan to the subsidiary. This enables the parent company to fund its subsidiary at a preferential exchange rate.

Swap involving the exchange of a new obligation for an existing obligation held by investors. A technique used recently in the U.S. in conjunction with original issue discount bonds as a means of realizing a capital gain on the retirement of a relatively low-coupon existing issue and at the same time achieving an interest cost saving due to special tax treatment of an original issue discount bond issued as part of such a swap.

See debt-equity swap.

The debt-equity ratio is the total liabilities of a firm divided by total shareholder equity

Mainly used to describe the ratio of total liabilities to shareholders' equity (net worth). It can also be used to describe the ratio of long-term debt to equity, net long-term debt to equity, total or long term debt to tangible equity (= equity plus revenue plus capital reserves). All these definitions are used in the World Bank and IFC, so care should be taken in translation to ensure the correct term is Bank.

The purchase by a nonprofit organization such as a non-governmental organization (NGO) of the external debt of a country at a discount in the secondary market, which the NGO then exchanges for local currency to be used for philanthropic purposes.

The repayment in kind by a debtor country of all or part of its external debt. Typically, the lender takes a specific, earmarked percentage of the receipts from the exports of a particular commodity or group of commodities to service the debt.

Financing part of a development project through the exchange of a foreign-currency-denominated debt for local currency, typically at a substantial discount. The process normally involves a foreign nongovernmental organization (NGO) that purchases the debt from the original creditor at a substantial discount using its own foreign currency resources, and then resells it to the debtor country government for the local currency equivalent (resulting in a further discount). The NGO in turn spends the money on a development project, previously agreed upon with the debtor country government.

A transaction in which debt of an economy is exchanged, usually at a discount, for equity in an enterprise in the same economy. Although variable in form, such arrangements usually result in the extinction of a fixed-rate liability (for example, a debt security or loan) denominated in foreign currency and the creation of an equity liability (denominated in domestic currency) to a nonresident. There may be clauses in the agreement to prevent the repatriation of capital before some specified future date.

A debt—for—nature swap is an arrangement by which an indebted developing country undertakes, in exchange for cancellation of a portion of its foreign debt, to establish local currency funds to be used to finance a conservation programme

There are two principles that may serve as the basis for geographic allocation of direct investment financial flows: the debtor/creditor principle and the transactor principle.
According to the debtor/creditor principle, transactions resulting from changes in financial claims of the compiling economy are allocated to the country or residence of the non-resident debtor, and transactions resulting in changes in financial liabilities are allocated to the country of residence of the non- resident creditor, even if the amounts are paid to or received from a different country

A debtor country is the country in which the debtor is resident

A statistical reporting system maintained by the World Bank to monitor the debt of developing countries. Information is supplied through reports from debtor countries. The data supplied are the basis for the annual World Bank report, Global Development Finance (formerly World Debt Tables).

Option under concessional Paris Club debt restructurings where creditors effect the required debt reduction in present value terms through a reduction of the principal of the consolidated amount. A commercial interest rate and standard repayment terms apply to the remaining amounts.

Ratio of net income after taxes plus interest on long-term debt plus depreciation to debt service.

External public debt-service ratio (i.e., interest and principal payments) as a percentage of export earnings from goods, nonfactor services, and workers' remittances.

Decay is the loss in the physical efficiency of an asset as it ages. Efficiency in this context refers to the asset’s ability to produce a quantity of capital services for a given of labour or materials.

Decent work is productive work performed in conditions of freedom, equity, security and human dignity, to which women and men have access on equal terms. Decent work is the converging focus of all the ILO’s four strategic objectives: the promotion of rights at work, employment, social protection, and social dialogue.

Transfer of decision-making authority and responsibility to lower levels of Government.