01834cas a2200253 a 4500 AALejournalIMF010123 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451922721 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Valuing Interest Payment Guarantees on Developing Country Debt. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper develops a technique to value guarantees on interest payments on developing-country debt, and provides some preliminary estimates of the cost of such guarantees. The cost of interest payment guarantees is not directly observable because a guarantee is a contingent obligation that becomes effective only if the debtor fails to make a certain payment. The strategy adopted in this paper is to estimate the market price that an interest payment guarantee would have if such a contract existed and were traded in financial markets. Using results from option pricing theory it is possible to calculate the price that an 'interest guarantee contract' would carry in financial markets on the basis of the price of developing-country debt in secondary markets. Mode of access: Internet United States imf IMF Working Papers; Working Paper ; No. 1990/018 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/018/001.1990.issue-018-en.xml IMF e-Library