Ldc Borrowing with Default Risk

@inproceedings{Sachs1999LdcBW,
  title={Ldc Borrowing with Default Risk},
  author={Jeffrey Sachs and Daniel Cohen},
  year={1999}
}
This paper presents a theoretical model to describe the effects of default risk on international lending to LDC sovereign borrowers. The threat of defaults in international lending is shown to give rise to many characteristics of the syndicated loan market: (1) quantity rationing of loans; (2) LDC policies designed to enhance creditworthiness; (3) prevalence of short maturities on international loans; and (4) a prevalence of bank lending relative to bond—market 
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