Sovereign haircuts / PRY

Paraguay

5 concluded restructurings, between 1885 and 1993. The earliest default they settle began in 1874. The worst cost creditors 64.4% of the present value of their claim, in 1895. The longest gap between a default and its settlement was 11 years.

Restructurings

47.3%

Median present-value haircut

64.4%

Worst present-value haircut

2 of 5

Cut face value by zero

$564M

Debt treated (2020 $)

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.

Present-value haircutFace-value reduction

Default	Settled	Years to settle	Present-value haircut	Face-value reduction	Debt treated (2020 $)	Source
1874	1885	11	44.9%	26.8%	$324M	Meyer, Reinhart and Trebesch (2022)
1892	1895	3	64.4%	0.0%	$119M	Meyer, Reinhart and Trebesch (2022)
1921	1924	3	51.9%	37.9%	$57M	Meyer, Reinhart and Trebesch (2022)
1933	1944	11	47.3%	12.3%	$31M	Meyer, Reinhart and Trebesch (2022)
1986	1993	7	29.2%	0.0%	$33M	Meyer, Reinhart and Trebesch (2022)

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

Bond prices

3 of 5 Paraguay restructuring episodes have Waterloo prices during the restructuring interval

The haircut file dates episodes by year. Waterloo matches them by country code and plots a padded window from one year before default through one year after settlement.

The public Waterloo bond panel in this repo runs from Jan 1, 1822 to Dec 1, 1980. This selector uses price only, never pbid or pask, and shows one line per bond from one year before default to one year after settlement. The author README defines price as “bond price in GBP and USD”; it does not document normalization to face value. Across all 329 haircut episodes, 111 have no Waterloo country-code match and 177 start after Dec 1, 1980. Those two counts overlap. 1 of 5 episode starts after the panel ends. 1 episode overlaps the panel but still has no non-null price observations in that window.

Episode

Selected episode: default 1921, settled 1924, case 231, spell PRY_1921-1924. Window: Jan 1, 1920 to Dec 31, 1925.

GBP bond prices

Independent GBP y-axis; values are not scaled against another currency.

Bond legend (GBP)

1-3% (2-4) Bonds of 1886 (GBP)

72 monthly observations across 1 bond. 48 of those observations fall inside the shaded restructuring interval. Earliest point in this window: Jan 1, 1920. Latest: Dec 1, 1925. One line equals one bond; no cross-bond average is computed.

Bond	Currency	ISIN	Obs.	First	Last
1-3% (2-4) Bonds of 1886	GBP	not recorded	72	Jan 1, 1920	Dec 1, 1925

Each option includes its case id and default-spell id. The chart includes every priced bond for that country in the window, so it does not identify bonds belonging to the selected restructuring. The one-year padding is a display window, one year either side; an editorial choice rather than a source-defined threshold. It uses waterloo_bonds.price only; pbid and pask are not averaged into it. The author README defines price as “bond price in GBP and USD” and does not document face-value normalization. GBP and USD observations use separate labelled panels and y-axes. Of the 329 episodes in the haircut file, 111 have no Waterloo country-code match and 177 start after 1980-12-01; these counts overlap. Later episodes show an absence message rather than an implied zero.

Source: Meyer, Reinhart & Trebesch, Sovereign Bonds since Waterloo (bond-price panel) | Harvard Dataverse, Sovereign Bonds since Waterloo Methodology

Default spells

Spell	From	To	Years	Restructurings
PRY_1874-1885	1874	1885	12	1
PRY_1892-1895	1892	1895	4	1
PRY_1921-1924	1921	1924	4	1
PRY_1933-1944	1933	1944	12	1
PRY_1986-1993	1986	1993	8	1

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 1 restructuring 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
Paraguay	1993-07-01	29.2%	29.2%	0.0%	11.7%	buyback	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

$30K 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 private creditors	$30K

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

Methodology, the measures, and what this data cannot tell you