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Charles Cohen, S. M. Ali Abbas, Anthony Myrvin, Tom Best, Mr. Peter Breuer, Hui Miao, Ms. Alla Myrvoda, and Eriko Togo
The COVID-19 crisis may lead to a series of costly and inefficient sovereign debt restructurings. Any such restructurings will likely take place during a period of great economic uncertainty, which may lead to protracted negotiations between creditors and debtors over recovery values, and potentially even relapses into default post-restructuring. State-contingent debt instruments (SCDIs) could play an important role in improving the outcomes of these restructurings.
Charles Cohen, S. M. Ali Abbas, Anthony Myrvin, Tom Best, Mr. Peter Breuer, Hui Miao, Ms. Alla Myrvoda, and Eriko Togo

tied to future official sector debt suspensions; this would help avoid the difficulty of identifying triggers for another unforeseen global shock. Introduction Following the COVID-19 shock, many countries may need to undertake sovereign debt restructurings (SoDRs) during a period of great macroeconomic uncertainty . This elevated uncertainty, and the implications for sovereign recoveries, poses the risk that both sovereign debtors and their creditors would be less willing to agree to terms of SoDRs in a timely fashion. In addition to deleteriously prolonging