Sovereign debt

Sovereign debt,

Definition of Sovereign debt:

  1. Sovereign debt is also called government debt, public debt, and national debt.

  2. The amount of money that a countrys government has borrowed, typically issued as bonds denominated in a reserve currency.

  3. Government debt, especially that held in bonds denominated in foreign currencies.

    Under the doctrine of sovereign immunity, the repayment of sovereign debt cannot be forced by the creditors and it is thus subject to compulsory rescheduling, interest rate reduction, or even repudiation. The only protection available to the creditors is threat of the loss of credibility and lowering of the international standing (the sovereign debt rating) of a country, which may make it much more difficult to borrow in the future.

  4. Sovereign debt is a central government's debt. It is debt issued by the national government in a foreign currency in order to finance the issuing country's growth and development. The stability of the issuing government can be provided by the country's sovereign credit ratings which help investors weigh risks when assessing sovereign debt investments.

How to use Sovereign debt in a sentence?

  1. Many people believe that China has too great a hold on the US economy because of all the US sovereign debt it owes to China.
  2. The most important risk in sovereign debt is the risk of default by the issuing country. For this reason, countries with stable economies and political systems are considered to be less of a default risk in comparison to countries with a history of instability.
  3. The anxieties about sovereign debt have been most acute in Europe.
  4. Measurement and assigned ratings for sovereign debt can vary between agencies.
  5. Sovereign debt is debt issued by a central government, usually in the form of securities, to finance various development initiatives within a country.
  6. The sovereign debt was a non factor in the decision making process as we were only concerned with cash transfers in the near future.
  7. Some countries may hold a very high sovereign debt and may allow your company a little extra leeway if you help pay it off.

Meaning of Sovereign debt & Sovereign debt Definition