Replication data for: A Seniority Arrangement for Sovereign Debt

Satyajit Chatterjee & Burcu Eyigungor
A sovereign's inability to commit to a course of action regarding future borrowing and default behavior makes long-term debt costly (the problem of debt dilution). One mechanism to mitigate this problem is the inclusion of a seniority clause in debt contracts. In the event of default, creditors are to be paid off in the order in which they lent (the \"absolute priority\" or \"first-in-time\" rule). In this paper, we propose a modification of the absolute...
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