Bondholders Agree Payment Pause for Crisis Hit Emerging Markets

Developing countries will be given extra time to meet debt payments when hit by natural or economic disasters under plans drawn up by the UK government and a group of international bondholders.

The arrangements, first floated last October, are designed to prevent emerging markets sinking into a debt spiral when disaster strikes. Under the proposals by the London Coalition on Sustainable Sovereign Debt and driven by the UK government, developing countries will be able to trigger a “pause clause” to defer debt payments in a crisis such as an armed conflict, hurricane or pandemic.