Credit FAQ: Beyond DSSI: S&P's Perspective On The G20 Common Framework For Debt Relief

The G20 announced a temporary debt relief scheme for the poorest countries in mid-April 2020 to mitigate the human and economic fallout of the COVID-19 pandemic. Formalized as the Debt Service Suspension Initiative (DSSI), this scheme allows the temporary suspension of interest and principal repayment on G20 official bilateral loans to eligible low- and lower-middle-income countries that are current on their debt service obligations to the IMF and the World Bank. In practice, the implementation of the deal has been led by the Paris Club group of largely Western sovereign creditors, working alongside other major lenders like China. Originally slated to end on Dec. 31, 2020, the terms of the DSSI have since been extended to June 2021. The IMF

...- At its 2020 annual summit in Riyadh in November, the G20 Group agreed the "Common Framework for Debt Treatments beyond the DSSI". It aims to address the high sovereign debt burdens of the world's poorest countries through the global coordination of official government and private creditor debt deferment and relief. - If "official" creditors provided debt relief, we would typically not view a country's failure to meet its scheduled debt service obligations as constituting a sovereign default. - To the extent that a sovereign seeks debt relief from private creditors (nonofficial), we will undertake a case-by-case assessment to determine whether there has been a default on commercial debt. The G20 announced a temporary debt relief scheme for the poorest countries in mid-April 2020 to mitigate the human and economic fallout of the COVID-19 pandemic. Formalized as the Debt Service Suspension Initiative (DSSI), this scheme allows the temporary suspension of interest and principal repayment...

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