Course Overview

Sovereign debt has significant implications for both governmental (sovereign) and non-governmental (non-sovereign) entities within a country. As many developing countries face heightened sovereign debt vulnerabilities, the implications for non-sovereign entities—such as municipalities, regional governments, state-owned enterprises (SOEs), and private sector entities—can be particularly challenging.

In countries facing a high risk of debt default or already in default, the consequences can be severe, including the disruption of essential services, localized economic distress, and the potential for costly bailouts.

This course provides a critical appreciation of the nuances of sovereign debt and the mechanics of its management. Participants will learn to interpret debt reports, debt sustainability analyses, and debt management strategies to build resilience against sovereign debt pressures.

Course Objectives

This course is designed to equip non-sovereign debt managers with the knowledge and practical skills required to understand a sovereign debt portfolio, review debt reports and risks, and inform strategy to ensure resilience.

Upon successful completion of this course, participants will be able to:

• Analyze the legal and institutional framework governing sovereign borrowing.

• Review government debt management strategy and discern its implications.

• Assess the debt sustainability of the country.

• Evaluate various sources of sovereign financing, including domestic capital markets, bank loans, and public-private partnerships.

• Understand the mechanics and implications of bonds and other debt instruments.

• Identify contingent liabilities and other off-balance-sheet risks to a sovereign debt portfolio.

• Appreciate the role of transparency and communication with stakeholders, including central government, investors, and rating agencies.

Course Content / Modules

Module 1: Foundations of Sovereign Public Debt Management

• Why do Countries Borrow? The Loan Cycle

• The Legal and Institutional Framework:

  • National laws and regulations governing national borrowing.

  • The role and oversight of key debt management stakeholders.

Module 2: Debt Sustainability Analysis (DSA)

• Understanding the DSA and its implications.

• Frameworks for assessing debt sustainability.

Module 3: Debt Management Strategy

• Linking debt management to development plans and financing needs.

• Balancing financing requirements against risk tolerance.

• Cost-Risk Analysis of Sovereign Portfolios.

• Identifying and quantifying key financial risks: interest rate, currency, refinancing, and operational risk.

Module 4: Sources of Finance for Sovereign Entities

• Various sources and types of financing.

• The role of regional development banks.

Module 5: Public-Private Partnerships (PPPs) and Debt Implications

• Understanding the debt financing structures within PPPs.

• Contingent liabilities arising from PPP projects.

Module 6: Transparency, Accountability, and Stakeholder Management

• Practices in Debt Reporting and Disclosure:

  • Developing a debt statistics bulletin.

  • International standards for debt transparency.

• Effective Communication and Investor Relations:

  • Building and maintaining strong relationships with investors and financial institutions.

Target Audience

This course is designed for mid-to-senior level finance and treasury officials from non-sovereign public entities and private entities, including:

• Officials from Municipalities, Cities, and Regional Governments.

• Managers from State-Owned Enterprises (SOEs) and other public corporations.

• Public-Private Partnership (PPP) Project Managers.

• Professionals from Commercial Banks and Corporations.

• Representatives from Civil Society Organizations.