Sovereign haircuts / BRA
Brazil
9 concluded restructurings, between 1851 and 1994. The earliest default they settle began in 1830. The worst cost creditors 46.1% of the present value of their claim, in 1943. The longest gap between a default and its settlement was 21 years.
Every restructuring
Two measures of the same deals, never combined. The present-value haircut discounts what creditors got against what they were owed; the face-value reduction counts only principal written off.
| Default | Settled | Years to settle | Present-value haircut | Face-value reduction | Debt treated (2020 $) | Source |
|---|---|---|---|---|---|---|
| 1830 | 1851 | 21 | 4.0% | 0.0% | $536M | Meyer, Reinhart and Trebesch (2022) |
| 1898 | 1898 | 0 | 6.0% | 0.0% | $4.85B | Meyer, Reinhart and Trebesch (2022) |
| 1914 | 1914 | 0 | 4.4% | 0.0% | $8.63B | Meyer, Reinhart and Trebesch (2022) |
| 1931 | 1943 | 12 | 46.1% | 38.3% | $9.83B | Meyer, Reinhart and Trebesch (2022) |
| 1982 | 1983 | 1 | -9.8% | 0.0% | $9.87B | Cruces and Trebesch (2013) |
| 1983 | 1984 | 1 | 1.7% | 0.0% | $10.37B | Cruces and Trebesch (2013) |
| 1984 | 1986 | 2 | 19.2% | 0.0% | $13.56B | Cruces and Trebesch (2013) |
| 1986 | 1988 | 2 | 18.4% | 0.0% | $119.02B | Cruces and Trebesch (2013) |
| 1989 | 1994 | 5 | 29.3% | 9.1% | $69.55B | Cruces and Trebesch (2013) |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Debt treated is the amount restructured, deflated to constant 2020 US dollars in the source file. A negative haircut means the new instruments were worth more than the old claim. Methodology
Default spells
| Spell | From | To | Years | Restructurings |
|---|---|---|---|---|
| BRA_1830-1851 | 1830 | 1851 | 22 | 1 |
| BRA_1898-1898 | 1898 | 1898 | 1 | 1 |
| BRA_1914-1914 | 1914 | 1914 | 1 | 1 |
| BRA_1931-1943 | 1931 | 1943 | 13 | 1 |
| BRA_1982-1994 | 1982 | 1994 | 13 | 5 |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Duration counts both endpoints. The spells table also carries a cumulative-haircut column; it is not published here because it does not reconcile with the per-episode haircuts, see the methodology. Methodology
The Cruces-Trebesch record: a third measure and the discount rate
The Cruces-Trebesch file carries 6 restructurings here, and adds the market haircut (the new instruments against the face value of the old claim, undiscounted) and the exit yield used to do the discounting. The deal label is the file’s own and is finer than the country: it names the instrument class the deal covered. The two files were assembled separately, so a deal here need not line up one-to-one with a row above.
| Deal | Date | Present value | Market | Face value | Exit yield | Structure | Data quality |
|---|---|---|---|---|---|---|---|
| Brazil | 1983-02-01 | -9.8% | -9.8% | 0.0% | 9.3% | - | 2 / 5 |
| Brazil | 1984-01-01 | 1.7% | 3.5% | 0.0% | 14.1% | - | 2 / 5 |
| Brazil | 1986-09-01 | 19.2% | 19.2% | 0.0% | 12.8% | - | 2 / 5 |
| Brazil | 1988-11-01 | 18.4% | 22.8% | 0.0% | 14.2% | - | 2 / 5 |
| Brazil | 1992-11-01 | 27.0% | 27.0% | 0.0% | 13.3% | - | 4 / 5 |
| Brazil | 1994-04-01 | 29.3% | 38.9% | 9.1% | 11.8% | Brady deal | 3 / 5 |
Source: Cruces & Trebesch, haircut dataset (2014 update) Data quality is the file's own 1-to-5 index of how well the deal terms are documented. Methodology
Debt still in default
$250.0M across 1 creditor class in 2024. A haircut can only be measured once a restructuring concludes, so any of this that is still being negotiated is by construction absent from the tables above.
| Creditor class | In default, 2024 |
|---|---|
| Other official creditors | $250.0M |
Source: Bank of Canada-Bank of England Sovereign Default Database (CRAG) Bank of Canada terms (attribution). Includes domestic arrears, so it is not comparable with the debt-treated column above. Methodology