ABSTRACT
Professor Lessard gives an excellent description of the alternative modes of foreign financing available to a country. Contracting external debt on a commercial basis when the country is starting with a clean financial slate is much easier than when the country is severely overindebted. For countries like Chile that are working hard to regain their former access to international financial markets, improving the structure of their external debt is an imperative. A note of caution is necessary, however, about voluntary debt-equity swaps. Recontracting of the debt following commercial terms would help, but much more than that would have to happen in order to really solve the debt crisis. For countries like Chile that are working hard to regain their former access to international financial markets, improving the structure of their external debt is an imperative. The point is that there are new ways by which perceived risks are beginning to be neutralized by heavily indebted countries.
