Debt buyback
A debt buyback (also citizens bailout or short BBO ) refers to a debt-financed restructuring of sovereign debt to a bailout - customer , which is a vendor enabling the debt restructuring to pay the Debitorzinsen with Kreditorzinsen.
General
Similar to a debt rescheduling , a debt repurchase changes the existing obligations of a debtor in such a way that the existing interest and / or repayment burdens cannot lead to insolvency or overindebtedness .
At least the following are involved in the debt buyback:
- a debtor who bears the existing debt and intends to repurchase the debt with credit.
- a creditor who holds the outstanding debts and is ready to sell them.
- a bail-out - customer who takes out a loan in the bail-out vendor and weiterverleiht credit money to the debtor or buying its bonds.
- a bail-out vendor who provides credit to the bail-out customer.
The bail-out debtor has a special and privileged role because it acts both as a debtor to the bail-out creditor and as a creditor to the debtor. This enables a contractual construction of a structural credit rating that makes the bail-out debtor (regardless of his actual credit rating) creditworthy without restriction. The structural creditworthiness of the bail-out debtor is given if it is contractually agreed that the debtor interest is always set lower than the creditor interest. If the bail-out creditor also refinances himself with credit money, the debtor interest must be higher than the refinancing interest (e.g. the key interest rate of the central bank) of the bail-out creditor.
A debt repurchase is successful when the debtor and the bail-out partner (bail-out debtor and bail-out creditor) agree on the terms of the structural creditworthiness of the bail-out debtor - the following must apply: debtor out rates> debtor bailout rates> vendor refinancing rates - and creditors are ready to sell their claims to the debtor.
The bail-out partners finance their expenses with the interest spreads between the refinancing interest and the bail-out debtor interest or the bail-out creditor interest and the bail-out debtor interest . The debtor reduces his repayment burdens and benefits from the favorable price of his interest-bearing securities on the market.
The public debt buyback is an adequate financing model in the event of major upheavals in the financial system , in order to avert the impending insolvency of one or more states or to transfer the entire state financing to a pay-as-you-go system . A private debt buyback of a company with two bail-out partners is also conceivable.
Depending on whether banks or equal citizens take on the privileged role of the bail-out debtor in a public debt buyback, one speaks of one:
- Greek debt buyback or one
- Citizen or public bailout.