The Ldc Debt Market: It's A Jungle Out There

Time was when trading debt from less-developed countries was a real adventure. The market for the debt, chiefly nonperforming or troubled loans made by big banks to developing countries, was so illiquid that millions could be made and lost in a matter of days. Offers to sell could be several percentage points higher than offers to buy--and vice versa--assuming a trade could get done at all. Rumors flew through the market and sent prices up and down willy-nilly. LDC debt traders needed nerves of steel.

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