Sovereign haircuts / CUB
Cuba
5 concluded restructurings, between 1938 and 1985. The earliest default they settle began in 1933. The worst cost creditors 100.0% of the present value of their claim, in 1960. The longest gap between a default and its settlement was 5 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 |
|---|---|---|---|---|---|---|
| 1933 | 1938 | 5 | 19.6% | 19.8% | $584M | Meyer, Reinhart and Trebesch (2022) |
| 1960 | 1960repudiated | 0 | 100.0% | 100.0% | $356M | Cruces and Trebesch (2013) |
| 1983 | 1983 | 0 | 42.9% | 0.0% | $288M | Cruces and Trebesch (2013) |
| 1984 | 1984 | 0 | 44.2% | 0.0% | $220M | Cruces and Trebesch (2013) |
| 1985 | 1985 | 0 | 49.5% | 0.0% | $187M | 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 |
|---|---|---|---|---|
| CUB_1933-1938 | 1933 | 1938 | 6 | 1 |
| CUB_1960-1960 | 1960 | 1960 | 1 | 1 |
| CUB_1983-1985 | 1983 | 1985 | 3 | 3 |
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 3 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 |
|---|---|---|---|---|---|---|---|
| Cuba | 1983-12-01 | 42.9% | 42.9% | 0.0% | 31.7% | - | 3 / 5 |
| Cuba | 1984-12-01 | 44.2% | 44.2% | 0.0% | 28.0% | - | 2 / 5 |
| Cuba | 1985-09-01 | 49.5% | 49.5% | 0.0% | 27.2% | - | 2 / 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
$14.46B across 4 creditor classes 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 |
|---|---|
| Paris Club (bilateral official) | $5.05B |
| China (official) | $4.00B |
| Foreign-currency bank loans | $3.00B |
| Other official creditors | $2.40B |
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
Restructurings with Chinese creditors
3 restructurings with Chinese creditors are recorded here. No haircut is attached to any of them, so they cannot be placed on the scale above; the file records only whether face value or the interest rate was cut.
| Year | Type | Creditor | Terms |
|---|---|---|---|
| 2008 | Debt rescheduling only | Multiple | In 2008, China agreed to extend the repayment period for an unspecified amount of trade-related debt that Cuba accumulated in 1995 by ten additional years. In the same agreement, China also extended the repayment period of a 1998 zero-interest loan. According to AidData, the agreement was granted in response to the damage caused by hurricanes Gustav, Ike and Paloma earlier in 2008 as well as the global economic crisis. |
| 2010 | Debt rescheduling only | Sinosure | In 2010, the Cuban government and the China Export & Credit Insurance Corporation (SINOSURE) agree on a debt rescheduling. According to AidData, the debt that was renegotiated could be as high as $4 billion USD. |
| 2016 | Face Value Reduction | Multiple | In 2016, the Chinese Government reportedly forgave 42.7% ($2.83 billion) of the Cuban's Government's outstanding debt obligations (worth $6 billion) according to AidData. The Chinese Government reportedly rescheduled the remaining 52.8% of the the Cuban Government's outstanding debt obligations (worth $3.17 billion). The exact terms of this restructuring are unknown. |
Source: Horn, Reinhart & Trebesch, China's overseas lending and debt restructurings Methodology