GDP-Linked Sovereign Debt

Leland Goss, ICMA General Counsel and Starla Griffin of Slaney Advisors talk about the benefits of government bonds where the interest and principal are linked to a country’s GDP, adjusting the burden of debt repayment in line with the sovereign’s ability to pay and reducing the risk of sovereign debt crises and defaults in a recession. How are these instruments designed? And, in the wake of the pandemic, will GDP-linked bonds provide support for economies as they navigate rising debt burdens and transition to sustainable growth? ‘Term sheet’ for GDP-Linked bonds.