           DEFAULT
      AND RECOVERY

         STATISTICS

SOVEREIGN AND
SOVEREIGN-GUARANTEED
LENDING
1984-2024
           DEFAULT
      AND RECOVERY

         STATISTICS

SOVEREIGN AND
SOVEREIGN-GUARANTEED
LENDING
1984-2024
Multilateral development banks and development finance institutions default and recovery statistics

Sovereign and sovereign-guaranteed lending 1984-2024

                                                                                                                                 07 October 2025

 European Investment Bank (the "Administrator"), as host and administrator for, and on behalf of, Global Emerging
Markets Risk Database Consortium ("GEMs"), 07 October 2025. GEMs is a consortium of multilateral development banks
(MDBs) and development finance institutions (DFIs), including, as of 07 October 2025, the African Development Bank
(AfDB), Agence Franaise de Dveloppement (AFD), Asian Development Bank (ADB), Asian Infrastructure Investment Bank
(AIIB), Banque de Dveloppement des Etats de l'Afrique Centrale (BDEAC), Banque Ouest Africaine de Dveloppement
(BOAD), Black Sea Trade and Development Bank (BSTDB), British International Investment (BII), Cassa Depositi e Prestiti
(CDP), Central American Bank for Economic Integration (CABEI), Council of Europe Development Bank (CEB), Development
Bank of Southern Africa (DBSA), European Bank for Reconstruction and Development (EBRD), European Investment Bank
Group (EIB), GuarantCo, Inter-American Development Bank (IDB), Inter-American Investment Corporation (IDB Invest),
International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), International Fund
for Agricultural Development (IFAD), Islamic Development Bank (IsDB), Kreditanstalt fr Wiederaufbau (KfW), Multilateral
Investment Guarantee Agency (MIGA), Netherlands Development Finance Company (FMO), New Development Bank
(NDB), Proparco, and U.S. International Development Finance Corporation (DFC).

The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may
be a violation of applicable law. The provision and publication of this work and information do not constitute and shall not
be deemed to be a waiver of any of the privileges and immunities of any GEMs member (as applicable).

Disclaimer

Neither GEMs nor any of its members represents or warrants as to the accuracy, reliability or completeness of the content,
conclusions, or judgments of this work. Neither GEMs nor any of its members makes any express or implied warranties,
and all warranties of merchantability or fitness for a particular purpose or use with respect to this work and its contents
are hereby disclaimed. Similarly, while GEMs members believe that the statistics, information and results presented in this
document are based on reasonable assumptions and methodologies, the use of other assumptions and methodologies
might lead to different conclusions.

The information, contents, results and statistics in this document differ significantly from published historical data regarding
default rates to other creditors and should not be regarded as indicative of results that other creditors may experience.
They also reflect GEMs members' historical experience, which is not necessarily indicative of future performance. While the
GEMs members may publish updated information on a discretionary basis in the future, they assume no duty to provide
such update(s).

Neither GEMs nor any of its members shall be liable for any damages, including, without limitation, direct, indirect,
incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses
(including lost income or profits and opportunity costs or losses caused by negligence) in connection with any use of this
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Neither GEMs nor any of its members accept any responsibility or liability for the content, conclusions, or judgments, or
of any omissions or errors (including, without limitation, typographical and technical errors), in relation to this work or for
reliance thereon. The findings, interpretations and conclusions expressed in this work do not necessarily reflect, and should
not be taken as, the views of GEMs or any GEMs member or their respective constituents.

The contents of this work are intended for general informational purposes only and should not be relied upon for any
specific purpose. All relevant parties should make lending and investment decisions based on their own independent
decisions as to whether such transactions are appropriate for them based on their own judgment and circumstances, and
with advice from advisors as they deem necessary. This work does not constitute legal, securities, investment or any other
type of advice, an opinion regarding the appropriateness of any investment, or a solicitation of any type. The contents of
this work should not be relied upon for, without limitation, the calculation, determination or derivation of loss given default
(LGD) metrics, including, but not limited to, for any modelling or pricing purposes.

GEMs members may have an investment or other financial interest in, or provide advice or other services to, certain
companies and parties that underpin this work. The depiction and use of boundaries, geographic names and related data
shown on maps and in lists, tables, documents and databases are not warranted to be free of error and do not imply
official endorsement or acceptance by any of the GEMs members or their constituents.
The contents of this work should not be used in violation of these terms or of any law, or to promote any illegal activity
or enterprise or provide instructional information about illegal activities. Similarly, the contents of this work should not be
copied, modified, used to create a derivative work of, reverse engineered, reverse assembled or otherwise manipulated
(manually or through automated means) to identify any data that is not already made available by GEMs.

All rights reserved.

All queries on rights and licences, including subsidiary rights, should be addressed to the Administrator (publications@eib.
org). All names, logos and trademarks of GEMs and its members are their respective property. You may not use any such
name, logo or trademark (including GEMs) for any purpose without the express written consent of GEMs or the GEMs
Consortium members.

pdf: QH-01-25-043-EN-N  ISBN: 978-92-861-6012-7  doi: 10.2867/2100745

Printed on FSC Paper.
CONTENTS

   Preface                                                        ix

1  Highlights                                                     1

2  Characteristics of sovereign and sovereign-guaranteed lending  9

   2.1 Definition9

   2.2 Count of observations and defaults9

   2.3 Preferred creditor status10

   2.4 GEMs rating for countries 11

   2.5 Countries in the dataset12

3  Default rate statistics                                        18

   3.1 Default rate methodology 18

   3.2 Default rates by year19

   3.3 Default rates by region20

   .  3.3.1 Default rates by World Bank region20

   .  3.3.2 Default rates by continent 21

   3.4 Default rates by income group22

   3.5 Default rates by credit ratings24

   .  3.5.1 Marginal default rates by credit rating category24

   .  3.5.2 Cumulative default rates by credit rating category26

   .  3.5.3 Marginal default rates by credit rating27

   .  3.5.4 Cumulative default rates by credit rating28

4  Recovery rate statistics                                       29

   4.1 Recovery rates by year of default30

   4.2 Recovery rates by region31

   .  4.2.1 Recovery rates by World Bank region31

   .  4.2.2 Recovery rates by continent32

   4.3 Recovery rates by income group33

5  Rating migration rate statistics                               34

   5.1 Annual upgrade vs. downgrade ratio34

   5.2 Rating migration rates35
Preface

The Global Emerging Markets Risk Database Consortium (GEMs) is a joint initiative between the European
Investment Bank and the International Finance Corporation; it was established in 2009 to pool credit risk
data. This database is a unique example of a tangible common good and is designed to catalyse investments
in emerging markets and support technical cooperation between international institutions. GEMs serves as
a discussion and collaboration forum for building technical alignment and sharing best practices among
member institutions through working-level meetings. GEMs comprises multilateral development banks (MDBs)
and development finance institutions (DFIs) with business activities in emerging markets and developing
economies.

GEMs collects de-identified data from MDBs and DFIs on their performing and non-performing exposures across
emerging markets and developing economies, based on which output statistics are produced, encompassing
default and recovery rates that are categorised by various dimensions, such as geography, sector and income
group, among others. Compiling GEMs risk statistics relies on a robust and shared methodological framework,
bringing together data and expertise from leading public institutions. GEMs offers:

     9 a risk data hub of contract-level information for private and public lending and sovereign and
          sovereign-guaranteed lending  one of the largest such datasets for emerging markets and developing
          economies;

     9 a trusted data collection and processing platform hosting a scalable data model, which could be
          expanded to cover other contract-level data related to investment projects;

     9 a statistical platform for member MDBs and DFIs, with the ability to calculate GEMs outputs, default
          rates, recovery rates and rating migrations, facilitating better-informed investment decisions in
          emerging markets and developing economies;

     9 a public good data source for aggregated statistics, with the reported default and recovery rates for
          private, public and sovereign/sovereign-guaranteed lending, providing an anchor for risk perceptions;

     9 a framework for collaboration among member MDBs and DFIs to improve risk management practices
          across the industry.

More private investment is needed to combat climate change and achieve the Sustainable Development Goals.
Global institutions need to work together to address some of the current barriers to these private investments.
Some key barriers include, for instance, insufficient support for preparing well-designed projects; minimal
coordination between countries and institutions to facilitate the use of public resources to mitigate risks; a lack
of an appropriate legal and contractual environment; and a shortage of standardisation, transparency and
data availability. The scarcity of data around emerging markets and developing economies, coupled with the
tightening of regulatory requirements, calls for sophisticated risk management practices and more reliable
metrics.

Through GEMs, member MDBs and DFIs address the investment gap by sharing their experience and market
knowledge among themselves and with investors and the broader public. These banks and institutions pool
their data using a harmonised template and generate more valuable statistics than those available to any
individual lending institution. GEMs is thus a comprehensive data source for current and potential investors in
emerging markets  one that helps refine risk perceptions and inform better decision-making.

The scarcity of accessible, standardised, transparent and high-quality information on investment projects in
emerging markets can skew risk perceptions and lead to suboptimal investment decisions. Institutions with
little or no experience in such markets must rely on risk assumptions based on limited public information. By
anchoring risk perceptions with actual statistics, GEMs aims to help unlock capital that can fill such investment
gaps.

The statistics produced by GEMs enable the calibration and benchmarking of internal models, leading to
efficient provisioning, greater accuracy in setting capital requirements and better-informed investment decisions.
In other words, GEMs statistics provide an objective, reliable and statistically significant basis for discussing
regulatory compliance, capital adequacy and risk management practices with auditors, rating agencies and
supervisors. Furthermore, the statistics can be a powerful tool for transparent assessment of portfolio risks when

                                                                                                                                        Preface ix
third parties engage in risk transfer or co-financing operations with MDBs or DFIs, or in any other balance
sheet optimisation initiative  thus supporting the crowding-in of additional funding for emerging markets.
Since 2021, GEMs has shared its aggregated statistics publicly, recognising the potential value for various
stakeholders, ranging from academics to regulators and commercial entities. This report builds on past
publications, combining and offering default and recovery statistics in greater detail and reflecting the
contributing institutions' lending profiles in emerging markets and developing economies. The report discloses
statistics derived from pooled GEMs data from 1994 to 2024, provided by 11 member institutions. It also
encompasses niche features and unique insights and covers the methodological framework for generating
GEMs statistics.
Specific applications of GEMs statistics may vary across institutions. GEMs welcomes feedback from readers of
this report and looks forward to working with financial stakeholders to improve the focus and content of future
publications, aiming to support new and sustainable investment where it is most needed.

                               GEMs member institutions participating in this publication:

x Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
1 Highlights

This GEMs publication on sovereign and sovereign-guaranteed lending provides statistics based on a
dataset covering a 41-year period, from 1984 to 2024. For the first time, it includes recovery rates statistics
disaggregated by the year of default, as well as default and recovery rates by continent.

Compared with the 2024 publication, the count of default events has been revised to reflect that borrowers
may default on one multilateral development bank (MDBs) while continuing to meet obligations to others.

Statistical metrics are provided on the underlying distributions of the results, enabling readers to assess the
statistical significance of the average default and recovery rates. As default rate distributions generally follow a
normal distribution, 90% confidence intervals are presented for averages. In contrast, recovery rate distributions
are heavily skewed, so percentiles are provided instead.

Figure 1 illustrates sovereign and sovereign-guaranteed lending to the 167 countries included in the GEMs
dataset, along with the default events they experienced. Over the 41-year observation period, 39 countries
defaulted  some more than once  and 15 countries had ongoing default events at the end of 2024.

Figure 1: Exposures and default events for countries by year

                ISO code and          1984
             ISO country name              1985
AF-Afghanistan                                  1986
AG-Antigua and Barbuda                               1987
AL-Albania                                                 1988
AM-Armenia                                                      1989
AO-Angola                                                            1990
AR-Argentina                                                              1991
AZ-Azerbaijan                                                                   1992
BA-Bosnia and Herzegovina                                                            1993
BB-Barbados                                                                               1994
BD-Bangladesh                                                                                  1995
BF-Burkina Faso                                                                                      1996
BG-Bulgaria                                                                                               1997
BH-Bahrain                                                                                                     1998
BI-Burundi                                                                                                          1999
BJ-Benin                                                                                                                  2000
BN-Brunei Darussalam                                                                                                           2001
BO-Bolivia                                                                                                                          2002
BR-Brazil                                                                                                                                2003
BS-Bahamas                                                                                                                                     2004
BT-Bhutan                                                                                                                                           2005
BW-Botswana                                                                                                                                              2006
BY-Belarus                                                                                                                                                    2007
BZ-Belize                                                                                                                                                           2008
CD-Congo, The Democratic Republic of                                                                                                                                     2009
CF-Central African Republic                                                                                                                                                   2010
CG-Congo                                                                                                                                                                           2011
CI-Cte d'Ivoire                                                                                                                                                                         2012
CK-Cook Islands                                                                                                                                                                               2013
CL-Chile                                                                                                                                                                                           2014
CM-Cameroon                                                                                                                                                                                             2015
CN-China                                                                                                                                                                                                      2016
CO-Colombia                                                                                                                                                                                                        2017
CR-Costa Rica                                                                                                                                                                                                           2018
CU-Cuba                                                                                                                                                                                                                      2019
CV-Cape Verde                                                                                                                                                                                                                      2020
CY-Cyprus                                                                                                                                                                                                                               2021
CZ-Czechia                                                                                                                                                                                                                                   2022
DJ-Djibouti                                                                                                                                                                                                                                       2023
DM-Dominica                                                                                                                                                                                                                                             2024
DO-Dominican Republic

= no MDB exposure                     = partial default to MDBs
= MDB exposure, no default            = default to all MDBs

                                                                 Highlights 1
Figure 1: Exposures and default events for countries by year (continued)

                ISO code and   1984
             ISO country name       1985
DZ-Algeria                               1986
EC-Ecuador                                    1987
EE-Estonia                                          1988
EG-Egypt                                                 1989
ER-Eritrea                                                    1990
ET-Ethiopia                                                        1991
FJ-Fiji                                                                  1992
FM-Micronesia                                                                 1993
GA-Gabon                                                                           1994
GD-Grenada                                                                              1995
GE-Georgia                                                                                    1996
GH-Ghana                                                                                           1997
GM-Gambia                                                                                               1998
GN-Guinea                                                                                                    1999
GQ-Equatorial Guinea                                                                                               2000
GT-Guatemala                                                                                                            2001
GW-Guinea-Bissau                                                                                                             2002
GY-Guyana                                                                                                                         2003
HN-Honduras                                                                                                                             2004
HR-Croatia                                                                                                                                   2005
HT-Haiti                                                                                                                                          2006
HU-Hungary                                                                                                                                             2007
ID-Indonesia                                                                                                                                                 2008
IL-Israel                                                                                                                                                         2009
IN-India                                                                                                                                                               2010
IQ-Iraq                                                                                                                                                                     2011
IR-Iran                                                                                                                                                                           2012
JM-Jamaica                                                                                                                                                                             2013
JO-Jordan                                                                                                                                                                                   2014
KE-Kenya                                                                                                                                                                                         2015
KG-Kyrgyzstan                                                                                                                                                                                          2016
KH-Cambodia                                                                                                                                                                                                 2017
KI-Kiribati                                                                                                                                                                                                      2018
KM-Comoros                                                                                                                                                                                                            2019
KN-Saint Kitts & Nevis                                                                                                                                                                                                      2020
KR-Korea                                                                                                                                                                                                                         2021
KZ-Kazakhstan                                                                                                                                                                                                                         2022
LA-Lao                                                                                                                                                                                                                                     2023
LB-Lebanon                                                                                                                                                                                                                                       2024
LC-Saint Lucia
LK-Sri Lanka
LR-Liberia
LS-Lesotho
LT-Lithuania
LV-Latvia
MA-Morocco
MD-Moldova
ME-Montenegro
MG-Madagascar
MH-Marshall Islands
MK-Macedonia
ML-Mali
MM-Myanmar
MN-Mongolia
MR-Mauritania
MU-Mauritius
MV-Maldives
MW-Malawi
MX-Mexico
MY-Malaysia
MZ-Mozambique
NA-Namibia
NC-New Caledonia
NE-Niger

= no MDB exposure              = partial default to MDBs
= MDB exposure, no default     = default to all MDBs

2 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
Figure 1: Exposures and default events for countries by year (continued)

                ISO code and         1984
             ISO country name             1985
NG-Nigeria                                     1986
NI-Nicaragua                                        1987
NP-Nepal                                                  1988
NR-Nauru                                                       1989
OM-Oman                                                             1990
PA-Panama                                                                1991
PE-Peru                                                                        1992
PF-French Polynesia                                                                 1993
PG-Papua New Guinea                                                                      1994
PH-Philippines                                                                                1995
PK-Pakistan                                                                                         1996
PL-Poland                                                                                                1997
PS-Palestinian Territory                                                                                      1998
PW-Palau                                                                                                           1999
PY-Paraguay                                                                                                              2000
QA-Qatar                                                                                                                      2001
RO-Romania                                                                                                                         2002
RS-Republic of Serbia                                                                                                                   2003
RU-Russia                                                                                                                                     2004
RW-Rwanda                                                                                                                                          2005
SA-Saudi Arabia                                                                                                                                         2006
SB-Solomon Islands                                                                                                                                           2007
SC-Seychelles                                                                                                                                                      2008
SD-Sudan                                                                                                                                                                2009
SI-Slovenia                                                                                                                                                                  2010
SK-Slovakia                                                                                                                                                                       2011
SL-Sierra Leone                                                                                                                                                                         2012
SN-Senegal                                                                                                                                                                                   2013
SO-Somalia                                                                                                                                                                                        2014
SR-Suriname                                                                                                                                                                                            2015
SS-South Sudan                                                                                                                                                                                               2016
ST-Sao Tome and Principe                                                                                                                                                                                          2017
SV-El Salvador                                                                                                                                                                                                         2018
SX-Sint Maarten                                                                                                                                                                                                             2019
SY-Syrian Arab Republic                                                                                                                                                                                                           2020
SZ-Swaziland                                                                                                                                                                                                                           2021
TD-Chad                                                                                                                                                                                                                                     2022
TG-Togo                                                                                                                                                                                                                                          2023
TH-Thailand                                                                                                                                                                                                                                            2024
TJ-Tajikistan
TL-Timor-Leste
TM-Turkmenistan
TN-Tunisia
TO-Tonga
TR-Turkey
TT-Trinidad and Tobago
TV-Tuvalu
TZ-Tanzania
UA-Ukraine
UG-Uganda
UY-Uruguay
UZ-Uzbekistan
VC-Saint Vincent and the Grenadines
VE-Venezuela
VG-Virgin Islands
VN-Vietnam
VU-Vanuatu
WS-Samoa
XK-Kosovo (temporary code)
YE-Yemen
ZA-South Africa
ZM-Zambia
ZW-Zimbabwe

= no MDB exposure                    = partial default to MDBs
= MDB exposure, no default           = default to all MDBs

                                                                          Highlights 3
Number of countriesFigure 2 shows the number of countries in default with at least one MDB for each year of the 41-year
observation period. The relatively high number of countries in default during the late 1980s and 1990s was
followed by a significant decline throughout the 2000s and 2010s. However, an upward trend has been1984
observed since 2022.         1985
                                 1986
Figure 2: Number of countries in default by year1987
                                         1988
       20                                    1989
       19                                        1990
       18                                            1991
       17                                                1992
       16                                                    1993
       15                                                        1994
       14                                                             1995
       13                                                                 1996
       12                                                                     1997
       11                                                                         1998
       10                                                                             1999
                                                                                          2000
         9                                                                                    2001
         8                                                                                        2002
         7                                                                                            2003
         6                                                                                                2004
         5                                                                                                    2005
         4                                                                                                         2006
         3                                                                                                             2007
         2                                                                                                                 2008
         1                                                                                                                     2009
         0                                                                                                                         2010
                                                                                                                                       2011
Figure 3 displays the number of countries in default as a percentage of total countries in the GEMs dataset.                               2012
The graph closely mirrors the shape of Figure 2 but shows a lower peak in the later years, since the dataset                                   2013
includes more countries during those years.                                                                                                        2014
                                                                                                                                                       2015
Figure 3: Percentage of countries in default by year                                                                                                        2016
                                                                                                                                                                2017
       12%                                                                                                                                                          2018
       11%                                                                                                                                                              2019
       10%                                                                                                                                                                  2020
                                                                                                                                                                                2021
         9%                                                                                                                                                                         2022
         8%                                                                                                                                                                             2023
         7%                                                                                                                                                                                 2024
         6%
Percentage of Countries5%
         4%
         3%
         2%
         1%
         0%

4 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
                         1984
                             1985
                                 1986
                                     1987
                                         1988
                                             1989
                                                 1990
                                                     1991
                                                         1992
                                                             1993
                                                                 1994
                                                                     1995
                                                                         1996
                                                                             1997
                                                                                 1998
                                                                                     1999
                                                                                         2000
                                                                                             2001
                                                                                                 2002
                                                                                                     2003
                                                                                                         2004
                                                                                                             2005
                                                                                                                 2006
                                                                                                                     2007
                                                                                                                         2008
                                                                                                                             2009
                                                                                                                                 2010
                                                                                                                                     2011
                                                                                                                                          2012
                                                                                                                                              2013
                                                                                                                                                  2014
                                                                                                                                                      2015
                                                                                                                                                          2016
                                                                                                                                                              2017
                                                                                                                                                                  2018
                                                                                                                                                                      2019
                                                                                                                                                                          2020
                                                                                                                                                                              2021
                                                                                                                                                                                  2022
                                                                                                                                                                                      2023
                                                                                                                                                                                          2024
Based on observed defaults for countries over the 1984-2024 period, Table 1 shows an average annual
default rate of 0.77%. This represents a decrease from the 1.06% reported in the 2024 publication, primarily
due to a revised methodology for counting defaults, which is explained in detail in Section 3.2. Additionally,
the table presents the range of annual observations and the 90% confidence interval for the average.

Table 1: Overall default rate

            Signed                                   Minimum Maximum   Average   Lower of    Upper of
           amount                                                       annual      90%         90%
 Unique     million  Observed  Observaons  Defaults  annual annual     default
countries              years                                                    confidence  confidence
                                                     default default     rate     interval    interval

                                                          rate  rate

167 1 723 368        41        4 889       37.8      0.00%      4.82%  0.77%    0.51%       1.03%

Figure 4 displays the 41 individual annual default rates, with further detail provided in Table 8. Some of the
annual default rates are 0.00%, while others are relatively high, reflecting the uneven distribution of defaults
across the years. The range and 90% confidence interval shown in Table 1  0.00% to 4.82% and 0.51% to
1.03%, respectively  are relatively wide because of the overall scarcity of default events.

Figure 4 also provides average default rates for each of the last four decades. Relatively high annual default
rates are observed in the late 1980s and, to a lesser extent, in the 1990s, followed by lower rates through
2021. However, an increase in default rates since 2022 has reversed this downward trend in the most recent
ten-year average.

Figure 4: Default rates and averages by ten-year periods

                                                                                       Highlights 5
Figure 5 displays default rates by GEMs credit rating, with further details provided in Section 3.4. These rates
are significantly lower than those observed by credit rating agencies for sovereign borrowings from non-MDB
lenders. Even for the selective default (SD) rating  which indicates that a country is already in default with other
lenders  the observed default rate for MDBs is only 10.0%.

Figure 5: One-year default rates by credit rating

         11%
         10%

          9%
          8%
          7%
          6%
          5%
          4%
          3%
          2%
          1%
          0%
Observed one-year default rate
              AAA
                     AA+

                            AA
                                    AA-
                                           A+

                                                  A
                                                         A-
                                                                 BBB+
                                                                        BBB
                                                                               BBB-
                                                                                      BB+
                                                                                              BB
                                                                                                     BB-
                                                                                                            B+
                                                                                                                   B
                                                                                                                           B-
                                                                                                                                  CCC+
                                                                                                                                         CCC
                                                                                                                                                CCC-
                                                                                                                                                        CC
                                                                                                                                                               C
                                                                                                                                                                      SD
                                                                                                                                                                             Not rated
                                                   GEMs credit rating

                                     Default rate by GEMs rating     Average default rate

Table 2 shows the overall statistics for recovery rates. An average recovery rate of 95.1% is observed based
on 46 default events in 30 unique countries. Unresolved default events are not included in the recovery rate
statistics. The table also shows the range of results (from 47.1% to 100.0%) and the recovery levels for different
percentiles of the distribution.

Table 2: Overall average recovery rates

 Unique      Default       Average   Minimum 10th                    25th     Median       75th     90th Maximum
countries    events        recovery                                            98.1%
                                     observaon Percenle Percenle                           Percenle Percenle observaon
         30         46        rate
                                     47.1%  88.5%                    95.6%                 99.8% 100.0% 100.0%
                            95.1%

Table 3 and Figure 6 provide additional insight into the distribution of recovery rates by showing how many
individual observations fall within each 10-percentage-point range. Most of the results (89.1%) fall within the
90% to 100% range.

Table 3: Distribution of recovery rates

Recovery From 0%           10%       20%    30%    40%               50%      60%          70%   80% 90%
                           20%       30%    40%    50%               60%      70%          80%                         Total
rate         To 10%
                                                                                                 90% 100%

Defaults                0  0         0      0                     1        0  0            3     1  41  46

% of total   0.0% 0.0% 0.0% 0.0% 2.2% 0.0% 0.0% 6.5% 2.2% 89.1% 100%

6 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
Figure 6: Distribution of recovery rates

Further insight into the distribution of recovery rates within the 90% and 100% range is provided by breaking
this interval into 1-percentage-point increments, as shown in Table 4 and Figure 7. This analysis reveals that
61.0% of default events have recovery rates above 98% and that 46.3% have recovery rates exceeding 99%.

Table 4: Distribution of recovery rates  detail for 90% to 100%

Recovery From 90%  91%  92%               93%  94%  95%            96%  97%  98% 99%
                   92%  93%               94%  95%  96%            97%  98%                        Total
rate  To 91%
                                                                             99% 100%

Defaults    1      1    0                 2    1    3              3    5    6  19  41

% of total  2.4% 2.4% 0.0% 4.9% 2.4% 7.3% 7.3% 12.2% 14.6% 46.3% 100%

Figure 7: Distribution of recovery rates  detail for 90% to 100%

                                                                                Highlights 7
Table 5 and Figure 8 present data on the duration of default events. While about one-third of default events
last one year or less, and over two-thirds are concluded within five years, a few cases extend significantly
longer, with the longest one lasting more than 20 years. The median time to resolution is three years.

Table 5: Time to resolution of defaults

                                          Resolution of default during year                    Total

             1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 >=20

Annual       15 4 4 7 2 3 4 1 1 1 0 0 0 1 1                                  100         01    46

resolutions

Cumulative % 33% 41% 50% 65% 70% 76% 85% 87% 89% 91% 91% 91% 91% 93% 96% 98% 98% 98% 98% 100%
   resolved

Figure 8: Time to resolution of defaults

8 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
2 Characteristics of sovereign and
     sovereign-guaranteed lending

2.1 Definition

Data on sovereign and sovereign-guaranteed lending are provided by GEMs institutions that are exclusively
multilateral development banks (MDBs). This lending includes direct lending to sovereign countries and lending
to their states, institutions or agencies, with an explicit sovereign guarantee to ensure payments if individual
borrowers default.
All lending operations within a country, as considered in this publication, are connected via contractual
cross-default clauses within each MDB. Furthermore, if a sovereign falls into arrears on any single operation,
sanctions are applied to all operations of a sovereign simultaneously, regardless of whether the others are in
arrears.
To reflect the specific format of this lending, the following methodology is used in this publication:

      Default events are defined as payment delays on any operation that exceed the most severe sanction
          trigger applicable to each respective MDB, typically set at 180 days of payment delay.

      Resolution of default events occurs only when all overdue amounts  including principal, interest and
          any applicable charges  on all loans associated with the defaulting sovereign are fully paid.

2.2 Count of observations and defaults

Default rates among the individual contributing institutions range from 0.00% to 0.92%, with an observation-
weighted average of 0.59%. Across the 11 MDBs, there were 65 default events recorded over 11 010 annual
country-level observations.
Because countries often borrow from several MDBs, some defaults and observations overlap across institutions.
To address these duplicates, GEMs applies a specific methodology:

      Observations: One observation is counted per country per year, provided the country is not in default
          with any MDB on 1 January of that year. This approach reduces the number of observations from 11
          010 to 4 889, as shown in Table 1.

      Defaults: For each country and year, the default count is calculated as the ratio between the number
          of MDBs the country has defaulted on and the number of MDBs it has borrowed from. If a country
          defaults to an additional MDB in subsequent years, then the additional defaults are counted in the
          ratio for those years. This method reduces the number of defaults from 65 to 37.8, as shown in
          Table 1.

Note that this methodology differs from the approach used in the 2024 GEMs publication on sovereign and
sovereign-guaranteed lending. Previously, a default was counted as soon as a country defaulted on any MDB,
regardless of whether it defaulted on others. This earlier method did not accurately capture cases where
countries did not default across all MDBs during the same year. As a result, the previous approach yielded an
average default rate of 1.06%, which fell outside the range of 0.00% to 0.95% for the individual MDBs (see
Tables 1 and 6 in the 2024 publication).

                                                                   Characteristics of sovereign and sovereign-guaranteed lending 9
2.3 Preferred creditor status

The statistics in this publication show significantly lower default and recovery rates compared to other
publications on sovereign lending, such as those based on databases maintained by credit rating agencies for
lending by institutions except MDBs.
This superior performance is largely attributable to the unique features of MDBs. These institutions benefit from
stringent arrears policies, strong shareholding structures and a preferred creditor status for their sovereign and
sovereign-guaranteed loans.
Preferred creditor status is a well-established convention under which MDBs are given priority for debt
repayment when a country faces financial distress. Although not legally binding, it has been a cornerstone for
MDBs, allowing them to operate with low losses. The principle entails the following expectations:

          Countries commit to the timely payment of their financial obligations to MDBs.
      Countries commit to exempt MDBs from generalised payment moratoria and exchange rate controls.
      The International Monetary Fund typically requires that preferred creditor status be extended to itself

          and to MDBs with global membership as a condition for providing funding to a country in crisis.
      MDBs are exempt from participating in sovereign debt rescheduling. This benefit is granted by

          official creditors under the Paris Club and documented in the Paris Club Agreed Minutes. Under this
          exemption, MDBs are also not subject to the "comparability of treatment" clause, which requires all
          creditors to seek rescheduling terms comparable with those agreed by the Paris Club.
      Under the Group of 20's Common Framework for Debt Treatments beyond the DSSI (Debt Service
          Suspension Initiative), debt with MDBs is excluded from the comparable treatment requirements
          applied to official bilateral creditors and private creditors. Instead, MDBs are encouraged to develop
          options to help meet countries' longer-term financing needs while protecting their current credit
          ratings and access to low-cost funding.

10 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
2.4 GEMs rating for countries

The GEMs rating for countries (as shown in Table 6) is not collected from the member institutions. Instead,
it is calculated as the average of ratings for countries by the major credit rating agencies (S&P, Moody's and
Fitch). This approach ensures consistency in the rating scale across the MDBs contributing data to GEMs. In
cases where ratings from these agencies are unavailable, ratings from the Organisation for Economic Co-
operation and Development (OECD) are used as an alternative. If OECD ratings are also unavailable, then
World Risk Review ratings are applied. Countries for which none of these ratings are available are classified
as not rated (NR).

Table 6: Mapping of ratings

GEMs scale  S&P   Moody's  Fitch  OECD  WRR
                                   0.1    1
    AAA     AAA      Aaa   AAA      1
    AA+     AA+      Aa1   AA+      2     2
     AA      AA      Aa2    AA      3
    AA-     AA-      Aa3   AA-      4     3
     A+      A+       A1    A+      5     4
                      A2            6
      A       A       A3     A      7     5
     A-      A-     Baa1    A-            6
    BBB+    BBB+    Baa2   BBB+    NR     7
    BBB     BBB     Baa3   BBB            8
    BBB-    BBB-     Ba1   BBB-           9
    BB+     BB+      Ba2   BB+           10
     BB      BB      Ba3    BB           NR
     BB-     BB-      B1    BB-
     B+      B+       B2    B+
      B       B       B3     B
     B-      B-     Caa1    B-
    CCC+    CCC+    Caa2   CCC+
    CCC     CCC     Caa3   CCC
    CCC-    CCC-           CCC-
     CC      CC     Ca/C    CC
      C       C      NR      C
     SD      SD             SD
     NR      NR             NR

                  Characteristics of sovereign and sovereign-guaranteed lending 11
Number of active countriesFigure 9: Dataset composition by rating category  country count

       170                  1984
       160                     1985
       150                         1986
       140                             1987
       130                                 1988
       120                                     1989
       110                                         1990
       100                                             1991
                                                           1992
         90                                                    1993
         80                                                        1994
         70                                                            1995
         60                                                                1996
         50                                                                    1997
         40                                                                        1998
         30                                                                            1999
         20                                                                                2000
         10                                                                                    2001
                                                                                                   2002
          0                                                                                            2003
                                                                                                           2004
                                           AA A BBB BB B CCC CC/C SD NR                                        2005
                                                                                                                   2006
Figure 10: Dataset composition by rating category  percentage of total number of countries                            2007
                                                                                                                           2008
       100%                                                                                                                    2009
         90%                                                                                                                       2010
         80%                                                                                                                           2011
         70%                                                                                                                               2012
         60%                                                                                                                                   2013
         50%                                                                                                                                       2014
         40%                                                                                                                                           2015
         30%                                                                                                                                               2016
         20%                                                                                                                                                   2017
         10%                                                                                                                                                       2018
          0%                                                                                                                                                           2019
                                                                                                                                                                           2020
                                            AA A BBB BB B CCC CC/C SD NR                                                                                                       2021
                                                                                                                                                                                   2022
2.5 Countries in the dataset                                                                                                                                                           2023
                                                                                                                                                                                           2024
As detailed in Table 7, the dataset includes 167 countries, though not all were active throughout the entire 41-
year period covered by this publication. In addition to indicating the years that a country has been part of the
GEMs dataset, the table details the number of GEMs institutions that have provided lending to each country;
the region and continent to which each country is assigned; the cumulative signed amount of lending from
MDBs; and the first year a GEMs rating was assigned to the country.

12 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
Percentage of active countries

                1984
                    1985
                        1986
                            1987
                                1988
                                    1989
                                        1990
                                            1991
                                                1992
                                                    1993
                                                        1994
                                                            1995
                                                                1996
                                                                    1997
                                                                        1998
                                                                            1999
                                                                                2000
                                                                                    2001
                                                                                        2002
                                                                                            2003
                                                                                                2004
                                                                                                    2005
                                                                                                        2006
                                                                                                            2007
                                                                                                                2008
                                                                                                                    2009
                                                                                                                        2010
                                                                                                                            2011
                                                                                                                                2012
                                                                                                                                    2013
                                                                                                                                        2014
                                                                                                                                            2015
                                                                                                                                                2016
                                                                                                                                                    2017
                                                                                                                                                        2018
                                                                                                                                                            2019
                                                                                                                                                                2020
                                                                                                                                                                   2021
                                                                                                                                                                       2022
                                                                                                                                                                           2023
                                                                                                                                                                               2024
                                                                  Table 7: Dataset information for included countries

                                                                    ISO                     ISO country name        World Bank region         Continent  Number of  Signed amount      Outstanding   First year in  Last year in  First year of
                                                                  country                                                                                MDBs with       million       31 Dec. 2024    dataset        dataset     GEMs rating
                                                                           Afghanistan                        South Asia                  Asia
                                                                   code    Antigua and Barbuda                Latin America & Caribbean   North America    lending             793.0      million                       2024          1999
                                                                           Albania                            Europe & Central Asia       Europe                                 17.2                                   2024          1999
                                                                     AF    Armenia                            Europe & Central Asia       Europe               2             3 169.2   566.7 2005                       2024          1999
                                                                     AG    Angola                             Sub-Saharan Africa          Africa               2             2 568.0                                    2024          1999
                                                                     AL    Argentina                          Latin America & Caribbean   South America        5            10 018.5   3.8 1995                         2024          1999
                                                                    AM     Azerbaijan                         Europe & Central Asia       Europe               4            87 104.1                                    2024          1986
                                                                    AO     Bosnia and Herzegovina             Europe & Central Asia       Europe               4             6 950.2   1 534.3 1994                     2024          1999
                                                                     AR    Barbados                           Latin America & Caribbean   North America        5             4 619.6                                    2024          1999
                                                                     AZ    Bangladesh                         South Asia                  Asia                 5             1 960.5   1 795.6 1993                     2024          1994
                                                                     BA    Burkina Faso                       Sub-Saharan Africa          Africa               4            42 157.1                                    2024          1999
                                                                     BB    Bulgaria                           Europe & Central Asia       Europe               3             1 443.3   5 568.7 1984                     2024          1999
                                                                    BD     Bahrain                            Middle East & North Africa  Asia                 6             3 597.8                                    2024          1996
                                                                     BF    Burundi                            Sub-Saharan Africa          Africa               3             1 049.4   28 075.0 1984                    2024          1996
                                                                    BG     Benin                              Sub-Saharan Africa          Africa               2               135.2                                    2024          2007
                                                                    BH     Brunei Darussalam                  East Asia & Pacific         Asia                 1             1 336.0   3 230.2 1994                     2024          1999
                                                                     BI    Bolivia                            Latin America & Caribbean   South America        2                  4.6                                   2011          1999
                                                                     BJ    Brazil                             Latin America & Caribbean   South America        3             9 519.2   2 120.0 1984                     2024          1998
                                                                    BN     Bahamas                            Latin America & Caribbean   North America        1           115 030.2                                    2024          1986
Characteristics of sovereign and sovereign-guaranteed lending 13    BO     Bhutan                             South Asia                  Asia                 4             1 654.5   1 079.3 1984                     2024          1997
                                                                     BR    Botswana                           Sub-Saharan Africa          Africa               5             1 139.4                                    2024          1999
                                                                     BS    Belarus                            Europe & Central Asia       Europe               3             3 249.8   23 199.5 1984                    2024          1999
                                                                     BT    Belize                             Latin America & Caribbean   North America        2             2 111.7                                    2024          1999
                                                                    BW     Congo, The Democratic Republic of  Sub-Saharan Africa          Africa               4               583.2   720.8 1984                       2024          1999
                                                                     BY    Central African Republic           Sub-Saharan Africa          Africa               1               601.1                                    2024          1999
                                                                     BZ    Congo                              Sub-Saharan Africa          Africa               5                 35.1  515.0 1991                       2024          1999
                                                                    CD     Cte d'Ivoire                      Sub-Saharan Africa          Africa               3             1 651.9                                    2024          1999
                                                                     CF    Cook Islands                       East Asia & Pacific         Oceania              1             8 407.9   386.1 1997                       2024          1999
                                                                    CG     Chile                              Latin America & Caribbean   South America        4               141.8                                    2024          1998
                                                                     CI                                                                                        6            13 739.5   95.7 1984                        2024          1992
                                                                     CK                                                                                        2
                                                                     CL                                                                                        2                       627.5 1984

                                                                                                                                                                                       -             2005

                                                                                                                                                                                       5 161.3 1984

                                                                                                                                                                                       31 379.0 1984

                                                                                                                                                                                       959.4 1984

                                                                                                                                                                                       713.1 1984

                                                                                                                                                                                       1 423.4 1984

                                                                                                                                                                                       937.4 1993

                                                                                                                                                                                       209.2 1984

                                                                                                                                                                                       84.5 1984

                                                                                                                                                                                       17.0 1984

                                                                                                                                                                                       655.1 1984

                                                                                                                                                                                       2 365.3 1984

                                                                                                                                                                                       100.7 2009

                                                                                                                                                                                       2 912.5 1984
14 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024  Table 7: Dataset information for included countries (continued)

                                                                                            ISO                     ISO country name        World Bank region         Continent  Number of  Signed amount  Outstanding   First year in  Last year in  First year of
                                                                                          country                                                                                MDBs with                 31 Dec. 2024    dataset        dataset     GEMs rating
                                                                                                   Cameroon                           Sub-Saharan Africa          Africa                     million
                                                                                           code    China                              East Asia & Pacific         Asia           lending                      million                       2024          1999
                                                                                                   Colombia                           Latin America & Caribbean   South America                                                             2024          1988
                                                                                            CM     Costa Rica                         Latin America & Caribbean   North America  5          5 932.6        2 442.2 1984                     2024          1993
                                                                                             CN    Cuba                               Latin America & Caribbean   North America                                                             2024          1997
                                                                                             CO    Cape Verde                         Sub-Saharan Africa          Africa         6          100 576.7      39 700.3 1984                    2024          1999
                                                                                             CR    Cyprus                             Europe & Central Asia       Europe                                                                    2024          1999
                                                                                             CU    Czechia                            Europe & Central Asia       Europe         4          61 158.3       27 283.8 1984                    2024          1994
                                                                                             CV    Djibouti                           Middle East & North Africa  Asia                                                                      2024          1993
                                                                                             CY    Dominica                           Latin America & Caribbean   North America  4          11 656.7       4 443.0 1984                     2024          2009
                                                                                             CZ    Dominican Republic                 Latin America & Caribbean   North America                                                             2024          2009
                                                                                             DJ    Algeria                            Middle East & North Africa  Africa         2          90.8           42.6 2013                        2024          1997
                                                                                            DM     Ecuador                            Latin America & Caribbean   South America                                                             2024          1999
                                                                                            DO     Estonia                            Europe & Central Asia       Europe         4          542.5          333.4 1984                       2024          1997
                                                                                             DZ    Egypt                              Middle East & North Africa  Africa                                                                    2024          1997
                                                                                             EC    Eritrea                            Sub-Saharan Africa          Africa         3          1 351.3        283.1 1984                       2024          1996
                                                                                             EE    Ethiopia                           Sub-Saharan Africa          Africa                                                                    2024          2007
                                                                                             EG    Fiji                               East Asia & Pacific         Oceania        2          981.0          379.4 1991                       2024          1999
                                                                                             ER    Micronesia, Federated States of    East Asia & Pacific         Oceania                                                                   2024          1999
                                                                                             ET    Gabon                              Sub-Saharan Africa          Africa         2          216.8          108.2 1984                       2024          2009
                                                                                             FJ    Grenada                            Latin America & Caribbean   North America                                                             2024          1999
                                                                                            FM     Georgia                            Europe & Central Asia       Europe         3          16.2           0.6 1984                         2024          2002
                                                                                            GA     Ghana                              Sub-Saharan Africa          Africa                                                                    2024          1999
                                                                                            GD     Gambia                             Sub-Saharan Africa          Africa         5          16 059.1       6 555.1 1984                     2024          1999
                                                                                             GE    Guinea                             Sub-Saharan Africa          Africa                                                                    2024          1999
                                                                                            GH     Equatorial Guinea                  Sub-Saharan Africa          Africa         3          9 421.5        690.0 1984                       2024          1999
                                                                                            GM     Guatemala                          Latin America & Caribbean   North America                                                             2024          2000
                                                                                            GN     Guinea-Bissau                      Sub-Saharan Africa          Africa         4          25 394.6       14 959.6 1984                    2024          1997
                                                                                            GQ     Guyana                             Latin America & Caribbean   South America                                                             2024          1999
                                                                                             GT    Honduras                           Latin America & Caribbean   North America  2          373.8          200.0 1992                       2024          1999
                                                                                            GW     Croatia                            Europe & Central Asia       Europe                                                                    2024          1998
                                                                                             GY    Haiti                              Latin America & Caribbean   North America  6          36 187.7       17 443.6 1984                    2024          1997
                                                                                            HN     Hungary                            Europe & Central Asia       Europe                                                                    2024          2000
                                                                                             HR    Indonesia                          East Asia & Pacific         Asia           2          43.5           18.2 1994                        2024          1989
                                                                                             HT    Israel                             Middle East & North Africa  Asia                                                                      2024          1992
                                                                                             HU    India                              South Asia                  Asia           3          883.9          576.1 1984                       1997          1988
                                                                                             ID    Iraq                               Middle East & North Africa  Asia                                                                      2024          1988
                                                                                             IL                                                                                  5          1 137.3        809.7 1984                       2024          1999
                                                                                             IN
                                                                                             IQ                                                                                  1          74.5           32.0 2005

                                                                                                                                                                                 5          3 765.2        1 580.8 1984

                                                                                                                                                                                 3          55.0           18.1 1995

                                                                                                                                                                                 6          6 971.7        4 641.6 1997

                                                                                                                                                                                 3          885.4          236.2 1984

                                                                                                                                                                                 3          365.5          283.6 1984

                                                                                                                                                                                 4          1 403.3        785.1 1984

                                                                                                                                                                                 2          128.9          32.2 1984

                                                                                                                                                                                 4          12 313.6       4 018.6 1984

                                                                                                                                                                                 2          76.3           36.7 1984

                                                                                                                                                                                 5          1 718.5        870.6 1984

                                                                                                                                                                                 5          9 691.4        5 035.5 1984

                                                                                                                                                                                 3          6 766.1        2 025.1 1984

                                                                                                                                                                                 1          72.8           32.1 1984

                                                                                                                                                                                 3          7 912.6        907.7 1984

                                                                                                                                                                                 6          93 246.5       37 099.9 1984

                                                                                                                                                                                 1          273.4          -             1984

                                                                                                                                                                                 6          145 315.8      60 897.9 1984

                                                                                                                                                                                 2          5 014.9        2 700.2 1984
                                                                  Table 7: Dataset information for included countries (continued)

                                                                    ISO                     ISO country name                 World Bank region         Continent  Number of  Signed amount      Outstanding   First year in  Last year in  First year of
                                                                  country                                                                                         MDBs with       million       31 Dec. 2024    dataset        dataset     GEMs rating
                                                                           Iran, Islamic Republic of                   Middle East & North Africa  Asia
                                                                   code    Jamaica                                     Latin America & Caribbean   North America    lending           5 504.3      million                       2024          1999
                                                                           Jordan                                      Middle East & North Africa  Asia                               6 613.0                                    2024          1998
                                                                     IR    Kenya                                       Sub-Saharan Africa          Africa               2            12 630.7   902.4 1984                       2024          1995
                                                                     JM    Kyrgyzstan                                  Europe & Central Asia       Asia                 3             6 236.4                                    2024          1999
                                                                     JO    Cambodia                                    East Asia & Pacific         Asia                 5             1 654.3   2 359.6 1984                     2024          1999
                                                                     KE    Kiribati                                    East Asia & Pacific         Oceania              4             4 098.8                                    2024          2007
                                                                     KG    Comoros                                     Sub-Saharan Africa          Africa               6                       5 866.7 1984                     2024          2009
                                                                     KH    Saint Kitts & Nevis                         Latin America & Caribbean   North America        4                 50.6                                   2024          2009
                                                                     KI    Korea, Republic of                          East Asia & Pacific         Asia                 2                 41.0  3 813.3 1984                     2020          2000
                                                                    KM     Kazakhstan                                  Europe & Central Asia       Europe               2                 28.5                                   2013          1986
                                                                     KN    Lao, People's Democratic Republic           East Asia & Pacific         Asia                 2            22 813.7   890.8 1984                       2024          1996
                                                                     KR    Lebanon                                     Middle East & North Africa  Asia                 2            14 472.6                                    2024          2000
                                                                     KZ    Saint Lucia                                 Latin America & Caribbean   North America        4             2 673.8   2 252.3 1996                     2024          1997
                                                                     LA    Sri Lanka                                   South Asia                  Asia                 4             5 668.3                                    2024          2018
                                                                     LB    Liberia                                     Sub-Saharan Africa          Africa               4                 78.6  30.0 1999                        2024          1999
                                                                     LC    Lesotho                                     Sub-Saharan Africa          Africa               2            17 496.1                                    2024          1999
                                                                     LK    Lithuania                                   Europe & Central Asia       Europe               5               306.9   26.3 1984                        2024          1999
                                                                     LR    Latvia                                      Europe & Central Asia       Europe              3                400.6                                    2024          1996
                                                                     LS    Morocco                                     Middle East & North Africa  Africa              3              1 400.9   -             1991               2024          1997
                                                                     LT    Moldova, Republic of                        Europe & Central Asia       Europe              2                987.1                                    2024          1998
                                                                     LV    Montenegro                                  Europe & Central Asia       Europe              2             44 962.4   -             1984               2024          1997
                                                                    MA     Madagascar                                  Sub-Saharan Africa          Africa              5              1 897.4                                    2024          2004
                                                                    MD     Marshall Islands                            East Asia & Pacific         Oceania             4              2 115.4   6 482.6 1993                     2024          1999
                                                                    ME     Macedonia, The Former Yugoslav Republic Of  Europe & Central Asia       Europe              4                632.5                                    2024          2018
                                                                    MG     Mali                                        Sub-Saharan Africa          Africa              3                  70.2  1 365.2 1984                     2024          2004
                                                                    MH     Myanmar                                     East Asia & Pacific         Asia                1              3 674.6                                    2024          1999
Characteristics of sovereign and sovereign-guaranteed lending 15    MK     Mongolia                                    East Asia & Pacific         Asia                4              1 094.8   1 345.3 1984                     2024          1999
                                                                    ML     Mauritania                                  Sub-Saharan Africa          Africa              3              3 738.9                                    2024          1999
                                                                    MM     Mauritius                                   Sub-Saharan Africa          Africa              2              3 410.4   7.1 1986                         2024          1999
                                                                    MN     Maldives                                    South Asia                  Asia                5                913.2                                    2024          1996
                                                                    MR     Malawi                                      Sub-Saharan Africa          Africa              4              2 320.2   10 621.0 1984                    2024          1999
                                                                    MU     Mexico                                      Latin America & Caribbean   North America        4               500.7                                    2024          1999
                                                                    MV     Malaysia                                    East Asia & Pacific         Asia                 5               619.8   92.0 1984                        2024          1990
                                                                    MW     Mozambique                                  Sub-Saharan Africa          Africa               3            97 836.8                                    2024          1986
                                                                    MX     Namibia                                     Sub-Saharan Africa          Africa               4             6 928.9   84.4 1984                        2024          1999
                                                                    MY     New Caledonia                               East Asia & Pacific         Oceania              3               835.2                                    2024          2005
                                                                    MZ                                                                                                  4             1 956.3   654.6 1992                       2024       Not rated
                                                                    NA                                                                                                  3                 20.0
                                                                     NC                                                                                                 1                       10.4 1992

                                                                                                                                                                                                17 182.1 1984

                                                                                                                                                                                                802.0 1993

                                                                                                                                                                                                752.9 2001

                                                                                                                                                                                                347.9 1984

                                                                                                                                                                                                24.1 2001

                                                                                                                                                                                                1 024.3 1984

                                                                                                                                                                                                587.2 1984

                                                                                                                                                                                                1 045.1 1984

                                                                                                                                                                                                1 975.2 1996

                                                                                                                                                                                                352.6 1984

                                                                                                                                                                                                747.7 1984

                                                                                                                                                                                                235.8 1984

                                                                                                                                                                                                287.2 1984

                                                                                                                                                                                                27 004.4 1984

                                                                                                                                                                                                9.9 1984

                                                                                                                                                                                                446.5 1984

                                                                                                                                                                                                984.9 1994

                                                                                                                                                                                                10.6 2014
16 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024  Table 7: Dataset information for included countries (continued)

                                                                                            ISO            ISO country name  World Bank region             Continent      Number of  Signed amount                                                                  Outstanding   First year in  Last year in  First year of
                                                                                          country                                                                         MDBs with       million                                                                   31 Dec. 2024    dataset        dataset     GEMs rating

                                                                                           code                                                                             lending                                                                                    million        1984           2024          1999
                                                                                                                                                                                                                                                                                      1984           2024          1999
                                                                                          NE Niger                           Sub-Saharan Africa            Africa         3          932.5                                                                             426.0          1984           2024          1998
                                                                                                                                                                                                                                                                     3 357.3          1984           2024          1999
                                                                                          NG Nigeria                         Sub-Saharan Africa            Africa         5          14 657.6                                                                        4 721.7          1999           2013       Not rated
                                                                                                                                                                                                                                                                     4 629.5          1984           2024          1996
                                                                                          NI Nicaragua                       Latin America & Caribbean     North America  5          7 903.0                                                                                          1984           2024          1997
                                                                                                                                                                                                                                                                          -           1984           2024          1996
                                                                                          NP Nepal                           South Asia                    Asia           4          10 455.9                                                                          991.7          2012           2024       Not rated
                                                                                                                                                                                                                                                                     6 733.1          1984           2024          1998
                                                                                          NR Nauru                           East Asia & Pacific           Oceania        1          4.4                                                                             9 150.2          1984           2024          1993
                                                                                                                                                                                                                                                                                      1984           2024          1994
                                                                                          OM Oman                            Middle East & North Africa    Asia           2          1 592.9                                                                              5.1         1990           2024          1995
                                                                                                                                                                                                                                                                     2 835.0          1995           2024          2009
                                                                                          PA Panama                          Latin America & Caribbean     North America  4          14 211.4                                                                       32 365.4          2006           2024       Not rated
                                                                                                                                                                                                                                                                    26 844.6          1984           2024          1995
                                                                                          PE Peru                            Latin America & Caribbean     South America  4          32 289.0                                                                        5 999.3          2005           2013          1996
                                                                                                                                                                                                                                                                                      1984           2024          1996
                                                                                          PF French Polynesia                East Asia & Pacific           Oceania        1          7.5                                                                                14.6          1984           2024          1999
                                                                                                                                                                                                                                                                       110.6          1992           2024          1996
                                                                                          PG Papua New Guinea                East Asia & Pacific           Oceania        4          5 481.6                                                                         4 755.2          1984           2024          1999
                                                                                                                                                                                                                                                                                      1999           2024          1996
                                                                                          PH Philippines                     East Asia & Pacific           Asia           5          56 505.4                                                                             -           1984           2024          2000
                                                                                                                                                                                                                                                                     5 878.0          1984           2024          1973
                                                                                          PK Pakistan                        South Asia                    Asia           6          59 401.3                                                                        4 730.5          1984           2024          1999
                                                                                                                                                                                                                                                                     1 188.5          1984           2024          1996
                                                                                          PL Poland                          Europe & Central Asia         Europe         2          17 319.6                                                                                         1991           2024          1994
                                                                                                                                                                                                                                                                       296.8          1984           2024          2000
                                                                                          PS Palestine, State of*            Middle East & North Africa    Asia           2          183.1                                                                             128.2          1984           2024          1999
                                                                                                                                                                                                                                                                       114.9          1984           2024          1999
                                                                                          PW Palau                           East Asia & Pacific           Oceania        2          148.0                                                                             305.3          1985           2024          1999
                                                                                                                                                                                                                                                                       610.2          2021           2024          2013
                                                                                          PY Paraguay                        Latin America & Caribbean     South America  4          9 216.8                                                                           102.2          1984           2024          2000
                                                                                                                                                                                                                                                                       875.3          1984           2024          1996
                                                                                          QA Qatar                           Middle East & North Africa    Asia           1          0.3                                                                               236.0          2019           2024          2020
                                                                                                                                                                                                                                                                     3 058.3          1984           2024          1999
                                                                                          RO Romania                         Europe & Central Asia         Europe         3          18 779.5                                                                                         1984           2024          2007
                                                                                                                                                                                                                                                                          1.6
                                                                                          RS Republic of Serbia              Europe & Central Asia         Europe         3          13 162.8                                                                        1 028.9

                                                                                          RU Russia                          Europe & Central Asia         Europe         3          15 904.0                                                                             0.8
                                                                                                                                                                                                                                                                        29.5
                                                                                          RW Rwanda                          Sub-Saharan Africa            Africa         3          584.5                                                                           5 418.3
                                                                                                                                                                                                                                                                        46.2
                                                                                          SA Saudi Arabia                    Middle East & North Africa    Asia           2          242.7                                                                             898.1
                                                                                                                                                                                                                                                                       473.4
                                                                                          SB Solomon Islands                 East Asia & Pacific           Oceania        2          255.0

                                                                                          SC Seychelles                      Sub-Saharan Africa            Africa         4          484.2

                                                                                          SD Sudan                           Sub-Saharan Africa            Africa         3          984.6

                                                                                          SI Slovenia                        Europe & Central Asia         Europe         2          498.3

                                                                                          SK Slovakia                        Europe & Central Asia         Europe         2          1 517.7

                                                                                          SL Sierra Leone                    Sub-Saharan Africa            Africa         4          396.8

                                                                                          SN Senegal                         Sub-Saharan Africa            Africa         5          5 428.4

                                                                                          SO Somalia                         Sub-Saharan Africa            Africa         1          14.2

                                                                                          SR Suriname                        Latin America & Caribbean     South America  4          1 659.5

                                                                                          SS South Sudan                     Sub-Saharan Africa            Africa         1          1.6

                                                                                          ST Sao Tome and Principe           Sub-Saharan Africa            Africa         2          43.2

                                                                                          SV El Salvador                     Latin America & Caribbean     North America  5          14 564.4

                                                                                          SX Sint Maarten                    Latin America & Caribbean     North America  1          44.2

                                                                                          SY Syrian Arab Republic            Middle East & North Africa    Asia           4          2 126.1

                                                                                          SZ Swaziland                       Sub-Saharan Africa            Africa         4          1 189.9

                                                                                          *This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.
                                                                  Table 7: Dataset information for included countries (continued)

                                                                    ISO                     ISO country name        World Bank region         Continent  Number of  Signed amount  Outstanding   First year in  Last year in  First year of
                                                                  country                                                                                MDBs with       million   31 Dec. 2024    dataset        dataset     GEMs rating
                                                                           Chad                               Sub-Saharan Africa          Africa
                                                                   code    Togo                               Sub-Saharan Africa          Africa           lending                    million                       2024          1999
                                                                           Thailand                           East Asia & Pacific         Asia                                                                      2024          1999
                                                                     TD    Tajikistan                         Europe & Central Asia       Asia           4          868.6          388.7 1984                       2024          1989
                                                                     TG    Timor-Leste                        East Asia & Pacific         Asia                                                                      2024          1999
                                                                     TH    Turkmenistan                       Europe & Central Asia       Asia           4          543.7          138.4 1984                       2024          2013
                                                                     TJ    Tunisia                            Middle East & North Africa  Africa                                                                    2024          1997
                                                                     TL    Tonga                              East Asia & Pacific         Oceania        3          10 775.0       1 567.5 1984                     2024          1995
                                                                    TM     Trkiye                            Europe & Central Asia       Europe                                                                    2024          2009
                                                                     TN    Trinidad and Tobago                Latin America & Caribbean   North America  5          1 286.8        571.6 1997                       2024          1992
                                                                     TO    Tuvalu                             East Asia & Pacific         Oceania                                                                   2024          1993
                                                                     TR    Tanzania, United Republic of       Sub-Saharan Africa          Africa         2          483.3          142.1 2012                       2024          2009
                                                                     TT    Ukraine                            Europe & Central Asia       Europe                                                                    2024          1999
                                                                     TV    Uganda                             Sub-Saharan Africa          Africa         3          1 480.8        1 225.9 1994                     2024          1998
                                                                     TZ    Uruguay                            Latin America & Caribbean   South America                                                             2024          1999
                                                                     UA    Uzbekistan                         Europe & Central Asia       Asia           5          31 949.4       8 713.3 1984                     2024          1993
                                                                     UG    Saint Vincent and the Grenadines   Latin America & Caribbean   North America                                                             2024          1999
                                                                     UY    Venezuela                          Latin America & Caribbean   South America  3          71.4           26.3 1984                        2022          1999
                                                                     UZ    Virgin Islands, British            Latin America & Caribbean   North America                                                             2024          1973
Characteristics of sovereign and sovereign-guaranteed lending 17     VC    Vietnam                            East Asia & Pacific         Asia           6          81 240.7       20 045.2 1984                    2013       Not rated
                                                                     VE    Vanuatu                            East Asia & Pacific         Oceania                                                                   2024          1997
                                                                     VG    Samoa                              East Asia & Pacific         Oceania        3          2 327.1        647.4 1984                       2024          2009
                                                                    VN     Kosovo (temporary code)            Europe & Central Asia       Europe                                                                    2024          2009
                                                                     VU    Yemen                              Middle East & North Africa  Asia           2          4.1            1.7 2004                         2024          2011
                                                                    WS     South Africa                       Sub-Saharan Africa          Africa                                                                    2024          1999
                                                                     XK    Zambia                             Sub-Saharan Africa          Africa         4          2 438.0        964.0 1984                       2024          1994
                                                                     YE    Zimbabwe                           Sub-Saharan Africa          Africa                                                                    2024          1999
                                                                     ZA                                                                                  3          30 795.9       19 120.2 1993                    2024          1999
                                                                    ZM
                                                                    ZW                                                                                   4          1 567.7        953.9 1984

                                                                   Total                                                                                 3          14 191.0       4 961.9 1984

                                                                                                                                                         6          18 853.6       11 760.8 1993

                                                                                                                                                         2          31.4           -             1989

                                                                                                                                                         3          10 272.5       1 944.1 1984

                                                                                                                                                         1          5.5            -             1994

                                                                                                                                                         4          17 942.3       9 057.2 1984

                                                                                                                                                         2          83.1           47.7 1999

                                                                                                                                                         2          214.8          89.6 1984

                                                                                                                                                         4          524.8          213.5 2001

                                                                                                                                                         1          242.7          167.1 1990

                                                                                                                                                         4          13 351.7       7 804.9 1984

                                                                                                                                                         4          2 086.1        655.6 1984

                                                                                                                                                         4          1 995.3        773.2 1984

                                                                                                                                                                    1 723 368.1    664 905.2
3 Default rate statistics

3.1 Default rate methodology

The annual default rates and their averages and confidence intervals presented in this publication are derived
for the respective dimensions and categories using the equations below:
The default count for each year is calculated as:
Equation 1: Default count for year i

Where:

        di = Number of new defaults of countries during year i

        wj = Number of performing countries as of 1 January of year i

        MDBd              =  Number  of  MDBs  that  country  j  defaulted  to  during    year  i
                     i,j

        MDBn              =  Number  of  MDBs  with  lending  to  country   j  as  of  1  January  of  year  i
                     i,j

Annual default rates are averaged using the number of performing countries as of 1 January each year as
weights:

Equation 2: Annual default rate for year i

Where:
                   di = Number of new defaults of countries during year i
                   wi = Number of performing countries as of 1 January of year i

Annual default rates are averaged using the number of performing countries as of 1 January each year as
weights:
Equation 3: Average annual default rate

Where:
                   N = Number of years

Standard deviations of annual default rates are calculated using the number of performing countries as of 1
January each year as weights:
Equation 4: Standard deviation of annual default rates

18 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
Assuming default rates are normally distributed, the confidence intervals around the averages are determined
as:

Equation 5: Confidence intervals for annual default rates

Where:

        z* = z* -value from the standard normal distribution for the chosen confidence interval

3.2 Default rates by year

The 41 individual annual default rates range from 0.00% to 4.82%, as the observed defaults are not distributed
evenly over the 41-year period.

Table 8: Default rates by year

Year    Defaults    Active      Default rate  Year   Defaults    Active   Default rate
                  countries                                    countries
                                    0.60%     2005      0.0                   0.00%
1984    0.5       83                0.00%     2006      1.0       117         0.83%
                                    1.79%     2007      0.0       121         0.00%
1985    0.0       83                4.82%     2008      0.0       140         0.00%
                                    1.83%     2009      0.0       141         0.00%
1986    1.5       84                1.88%     2010      0.0       142         0.00%
                                    1.92%     2011      0.0       147         0.00%
1987    4.0       83                0.42%     2012      1.5       147         1.02%
                                    3.57%     2013      1.0       147         0.68%
1988    1.5       82                2.69%     2014      1.0       146         0.70%
                                    1.03%     2015      0.0       143         0.00%
1989    1.5       80                0.00%     2016      0.0       142         0.00%
                                    0.00%     2017      0.0       140         0.00%
1990    1.5       78                0.31%     2018      1.3       150         0.82%
                                    1.90%     2019      0.0       152         0.00%
1991    0.3       79                0.31%     2020      0.0       152         0.00%
                                    2.01%     2021      0.0       153         0.00%
1992    3.0       84                1.57%     2022      3.7       153         2.38%
                                    0.30%     2023      1.8       154         1.24%
1993    2.5       93                0.58%     2024      1.3       148         0.91%
                                    0.29%     Total    37.8       146        0.77%
1994    1.0       97                                             4 889

1995    0.0       102

1996    0.0       106

1997    0.3       106

1998    2.0       105

1999    0.3       106

2000    2.2       108

2001    1.7       106

2002    0.3       112

2003    0.7       115

2004    0.3       116

                                Characteristics of sovereign and sovereign-guaranteed lending 19
3.3 Default rates by region

3.3.1 Default rates by World Bank region

The World Bank Group classification of countries to regions is used for the statistics shown in this section.
Assignments of individual countries to regions can be found in Table 7.

Table 9: Default rates by World Bank region

World Bank region            Unique       Observed Number of Number of   Signed Lower of 90%  Average  Upper of 90%
                            countries       years defaults observations  amount confidence              confidence
East Asia & Pacific                                                                 interval default rate interval
Europe & Central Asia                28                                   million
Latin America & Caribbean            31
Middle East & North Africa           35   41   3.5   664                 330 963    0.06%     0.53%    1.00%
South Asia                           17                                  274 939    0.00%     0.31%    0.76%
Sub-Saharan Africa                     8  41   2.8   909                 579 108    0.43%     0.86%    1.29%
Overall                              48                                  157 267    0.35%     1.10%    1.85%
                                          41   10.5  1 216               277 259    0.00%     0.20%    0.48%
                                    167                                  103 832    0.63%     1.11%    1.59%
                                          41   5.0   456

                                          41   0.5   254

                                          41   15.4  1 390

                                          41   37.8  4 889               1 723 368  0.51%     0.77%    1.03%

Figure 11: Default rates by World Bank region

20 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
3.3.2 Default rates by continent

Table 10 and Figure 12 show the recovery rates by continent. (See Table 7 for the assignment of individual
countries to continents.)

Table 10: Default rates by continent

                Unique      Observed Number of Number of   Signed Lower of 90%      Average     Upper of 90%
               countries      years defaults observations                         default rate
Continent                                                  amount     confidence                confidence
                        52
Africa                  38                                  million interval                    interval
Asia                    27
Europe                  23             41  15.4  1 554     226 353    0.57%       0.99%         1.41%
North America           15                                 658 478    0.29%       0.69%         1.10%
Oceania                 12             41  7.0   1 008     251 664    0.00%       0.35%         0.83%
South America                                              197 815    0.17%       0.74%         1.31%
Overall                167             41  2.8   813                  0.00%       0.67%         1.47%
                                                             7 764    0.40%       1.06%         1.72%
                                       41  5.5   744       381 293

                                       41  2.0   298

                                       41  5.0   472

                                       41  37.8  4 889     1 723 368  0.51%       0.77%         1.03%

Figure 12: Default rates by continent

                                           Characteristics of sovereign and sovereign-guaranteed lending 21
3.4 Default rates by income group

The World Bank Group's historical income classification database has been used to assign countries to income
groups for the year in which each default occurred. For this analysis, the number of observed years is reduced
to 38, as historical income group data are only available from 1987 onward. Two countries in the dataset are
currently not categorised by the World Bank Group.

Note that the signed amounts and the count of unique countries shown in this section reflect income group
classifications as of the end of 2024.

Table 11: Default rates by income group at time of default

Income group at time of          Unique       Observed Number of Number of   Signed Lower of 90%  Average     Upper of 90%
default                         countries       years defaults observations  amount confidence                 confidence
                                                                                        interval default rate interval
High income                              36                                   million
Upper middle income                      52
Lower middle income                      51   38  -           468            153 929    0.00%     0.00%       0.00%
Low income                               25                 1 361            928 416    0.24%     0.60%       0.96%
Not available                              3  38  8.2       1 704            613 955    0.49%     0.86%       1.22%
Overall                                                     1 040             16 129    0.54%     1.11%       1.67%
                                        167   38  14.6                        10 272    0.00%     1.13%       2.56%
                                                              309
                                              38  11.5
                                                            4 889
                                              33  3.5

                                              41  37.8                       1 723 368  0.51%     0.77%       1.03%

Percentage of active countriesFigure 13: Dataset composition over time by income group

       100%
         90%
         80%
         70%
         60%
         50%
         40%
         30%
         20%
         10%
          0%

                                1984
                                   1985
                                       1986
                                           1987
                                               1988
                                                   1989
                                                       1990
                                                           1991
                                                               1992
                                                                   1993
                                                                       1994
                                                                           1995
                                                                               1996
                                                                                   1997
                                                                                       1998
                                                                                           1999
                                                                                               2000
                                                                                                   2001
                                                                                                       2002
                                                                                                           2003
                                                                                                               2004
                                                                                                                   2005
                                                                                                                       2006
                                                                                                                           2007
                                                                                                                               2008
                                                                                                                                   2009
                                                                                                                                       2010
                                                                                                                                           2011
                                                                                                                                               2012
                                                                                                                                                   2013
                                                                                                                                                       2014
                                                                                                                                                           2015
                                                                                                                                                               2016
                                                                                                                                                                   2017
                                                                                                                                                                       2018
                                                                                                                                                                           2019
                                                                                                                                                                               2020
                                                                                                                                                                                   2021
                                                                                                                                                                                       2022
                                                                                                                                                                                           2023
                                                                                                                                                                                               2024

                                High income Upper middle income Lower middle income Low income Not available

22 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
Figure 14: Default rates by income group at time of default
                                                                 Characteristics of sovereign and sovereign-guaranteed lending 23
3.5 Default rates by credit ratings

The calculation of default rates by credit rating for sovereign and sovereign-guaranteed lending in GEMs
follows a static cohort approach. Under this method, cohorts of countries with the same credit rating are
established as of 1 January each year. The default behaviour of countries within each cohort is then tracked
through the end of the observation period.
This approach has been selected because it reflects the typical lending structure of multilateral development
banks (MDBs) to developing countries. At any given time, multiple loans are outstanding to each country, and
new loans are often issued before or as previous loans mature. This results in continuous exposure to countries,
typically without a specific final maturity.
Using the static cohort approach, the marginal default rate in for a cohort formed in is calculated as follows:
Equation 6: Marginal default rate for a static cohort

Where:
                   dji = Number of defaulted countries in for the cohort formed in
                   n = Number of performing countries on 1 January of

                                    j

Combining all cohorts for each credit rating, the weighted marginal default rate in for all cohorts formed in
is calculated as:
Equation 7: Marginal default rate for all static cohorts for year i

Where:
                   K = Total number of cohorts for a credit rating, that is, the number of years for which a cohort
                         has been established for a given credit rating

Equation 8: Cumulative default rate for all static cohorts for year i
                   for i =1:
                   for i >1:

3.5.1 Marginal default rates by credit rating category

The observed marginal default rates presented in Table 12 do not follow the same patterns typically observed
in similar tables for sovereign or corporate exposures published by credit rating agencies. Due to the limited
number of defaults over the dataset's history, many cells are either empty or show values of 0.00%, reflecting
either a lack of observations or the absence of defaults. Unlike tables from credit rating agencies, Table 12
includes an NR category, as this classification represents a large part of historical observations. The results for
the NR category demonstrated that unrated countries are not necessarily more likely to default to MDBs than
rated countries.

24 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
Table 12: Marginal default rates by credit rating category and year

During  AAA  AA      A      BBB     BB      B                        CCC    CC/C   SD      NR
 year
              0.00%  0.00%   0.07%   0.00%  0.27%                                  10.00%   1.60%
1             0.00%  0.00%   0.07%   0.00%  0.28%                    1.02%  5.36%   2.00%   1.58%
              0.00%  0.00%   0.07%   0.00%  0.45%                    0.96%  0.00%   0.00%   1.52%
2             0.00%  0.00%   0.07%   0.00%  0.52%                    0.68%  0.00%   0.00%  1.39%
             0.00%   0.00%   0.00%   0.06%  0.59%                    0.70%  0.00%   0.00%  1.14%
3            0.00%   0.00%   0.00%   0.06%  0.63%                    0.64%  0.00%   0.00%  0.88%
             0.00%   0.00%   0.00%   0.07%  0.44%                    0.67%  0.00%   0.00%  0.68%
4            0.00%   0.00%   0.09%   0.11%  0.44%                    0.71%  0.00%   0.00%  0.49%
             0.00%   0.00%   0.09%   0.11%  0.47%                    0.70%  0.00%   0.00%  0.47%
5            0.00%   0.00%   0.10%   0.00%  0.59%                    0.55%  0.00%   0.00%  0.44%
             0.00%   0.00%   0.10%   0.00%  0.69%                    0.59%  0.00%   0.00%  0.33%
6            0.00%   0.00%   0.11%   0.00%  0.74%                    0.45%  0.00%   0.00%  0.25%
             0.00%   0.00%   0.12%   0.00%  0.80%                    0.49%  0.00%   0.00%  0.25%
7            0.00%   0.00%   0.14%   0.00%  0.88%                    0.53%  0.00%   0.00%  0.29%
             0.00%   0.00%   0.15%   0.00%  0.86%                    0.45%  0.00%   0.00%  0.33%
8            0.00%   0.00%   0.16%   0.00%  0.70%                    0.49%  0.00%   0.00%  0.29%
             0.00%   0.00%   0.17%   0.00%  0.69%                    0.73%  0.00%   0.00%  0.23%
9            0.00%   0.00%   0.19%   0.00%  0.67%                    0.80%  0.00%   0.00%  0.13%
             0.00%   0.00%   0.00%   0.14%  0.76%                    0.76%  0.00%   0.00%  0.08%
10           0.00%   0.00%   0.00%   0.15%  0.85%                    0.88%  0.00%   0.00%  0.10%
             0.00%   0.00%   0.00%   0.51%  0.40%                    0.88%  0.00%   0.00%  0.10%
11           0.00%   0.00%   0.00%   0.00%  1.03%                    1.42%  0.00%   0.00%  0.08%
             0.00%   0.00%   0.00%   0.94%  0.33%                    1.36%          0.00%  0.08%
12           0.00%   0.00%   0.00%   1.06%  0.39%                    1.71%                 0.17%
             0.00%   0.00%   0.00%   1.49%  0.00%                    0.69%                 0.21%
13           0.00%   0.00%   0.00%   1.28%  0.00%                    0.00%                 0.21%
             0.00%   0.00%   0.00%   1.22%  0.00%                    0.00%                 0.25%
14           0.00%   0.00%   0.00%   0.00%  2.22%                                          0.27%
             0.00%   0.00%   0.00%   0.00%  2.70%                                          0.29%
15           0.00%   0.00%   0.00%   2.86%  0.00%                                          0.20%
                     0.00%   0.00%   3.85%  0.00%                                          0.12%
16                   0.00%   0.00%   5.56%  0.00%                                          0.13%
                     0.00%   0.00%   7.14%  0.00%                                          0.15%
17                   0.00%   0.00%  10.00%  0.00%                                          0.17%
                     0.00%   0.00%  12.50%  0.00%                                          0.19%
18                   0.00%   0.00%   0.00%  0.00%                                          0.21%
                     0.00%   0.00%   0.00%  0.00%                                          0.25%
19                   0.00%   0.00%   0.00%  0.00%                                          0.31%
                                     0.00%  0.00%                                          0.41%
20                                   0.00%  0.00%                                          0.31%

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

                            Characteristics of sovereign and sovereign-guaranteed lending 25
3.5.2 Cumulative default rates by credit rating category

Table 13: Cumulative default rates by credit rating category and year

During  AAA  AA      A      BBB     BB       B                         CCC     CC/C       SD      NR
 year
              0.00%  0.00%   0.07%   0.00%   0.27%                                        10.00%   1.60%
1             0.00%  0.00%   0.13%   0.00%   0.55%                      1.02%  5.36%      11.80%   3.15%
              0.00%  0.00%   0.20%   0.00%   1.00%                      1.97%  5.36%      11.80%   4.62%
2             0.00%  0.00%   0.28%   0.00%   1.51%                      2.64%  5.36%      11.80%   5.95%
              0.00%  0.00%   0.28%   0.06%   2.09%                      3.32%  5.36%      11.80%   7.02%
3            0.00%   0.00%   0.28%   0.13%   2.71%                      3.94%  5.36%      11.80%   7.84%
             0.00%   0.00%   0.28%   0.19%   3.14%                      4.59%  5.36%      11.80%   8.46%
4            0.00%   0.00%   0.36%   0.30%   3.56%                      5.26%  5.36%      11.80%   8.91%
             0.00%   0.00%   0.45%   0.41%   4.02%                      5.92%  5.36%      11.80%   9.34%
5            0.00%   0.00%   0.55%   0.41%   4.58%                      6.44%  5.36%      11.80%   9.73%
             0.00%   0.00%   0.65%   0.41%   5.24%                      6.99%  5.36%      11.80%  10.03%
6            0.00%   0.00%   0.76%   0.41%   5.94%                      7.41%  5.36%      11.80%  10.25%
             0.00%   0.00%   0.89%   0.41%   6.69%                      7.86%  5.36%      11.80%  10.48%
7            0.00%   0.00%   1.02%   0.41%   7.51%                      8.35%  5.36%      11.80%  10.74%
             0.00%   0.00%   1.17%   0.41%   8.30%                      8.76%  5.36%      11.80%  11.04%
8            0.00%   0.00%   1.32%   0.41%   8.94%                      9.21%  5.36%      11.80%  11.30%
             0.00%   0.00%   1.50%   0.41%   9.57%                      9.88%  5.36%      11.80%  11.51%
9            0.00%   0.00%   1.68%   0.41%  10.17%                     10.60%  5.36%      11.80%  11.62%
             0.00%   0.00%   1.68%   0.55%  10.86%                     11.28%  5.36%      11.80%  11.69%
10           0.00%   0.00%   1.68%   0.70%  11.62%                     12.06%  5.36%      11.80%  11.78%
             0.00%   0.00%   1.68%   1.20%  11.98%                     12.83%  5.36%      11.80%  11.87%
11           0.00%   0.00%   1.68%   1.20%  12.88%                     14.07%  5.36%      11.80%  11.94%
             0.00%   0.00%   1.68%   2.14%  13.17%                     15.24%             11.80%  12.02%
12           0.00%   0.00%   1.68%   3.18%  13.50%                     16.69%                     12.16%
             0.00%   0.00%   1.68%   4.62%  13.50%                     17.27%                     12.35%
13           0.00%   0.00%   1.68%   5.84%  13.50%                     17.27%                     12.54%
             0.00%   0.00%   1.68%   6.99%  13.50%                     17.27%                     12.76%
14           0.00%   0.00%   1.68%   6.99%  15.43%                                                12.99%
             0.00%   0.00%   1.68%   6.99%  17.71%                                                13.24%
15           0.00%   0.00%   1.68%   9.65%  17.71%                                                13.42%
                     0.00%   1.68%  13.12%  17.71%                                                13.52%
16                   0.00%   1.68%  17.95%  17.71%                                                13.63%
                     0.00%   1.68%  23.81%  17.71%                                                13.76%
17                   0.00%   1.68%  31.43%  17.71%                                                13.90%
                     0.00%   1.68%  40.00%  17.71%                                                14.06%
18                   0.00%   1.68%  40.00%  17.71%                                                14.25%
                     0.00%   1.68%  40.00%  17.71%                                                14.46%
19                   0.00%   1.68%  40.00%  17.71%                                                14.73%
                                    40.00%  17.71%                                                15.08%
20                                  40.00%  17.71%                                                15.34%

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

26 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
                                                                  3.5.3 Marginal default rates by credit rating

                                                                  Breaking down the rating categories into individual ratings, as shown in Table 14, highlights the impact of the scarcity of default observations.

                                                                  Table 14: Marginal default rates by credit rating and year

                                                                  During  AAA  AA+  AA     AA-    A+     A      A-     BBB+ BBB BBB- BB+                  BB      BB-     B+     B      B-     CCC+ CCC CCC-         CC     C      SD      NR
                                                                   year

Characteristics of sovereign and sovereign-guaranteed lending 27  1                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.15%  0.00%   0.00%   0.00%  0.00%  0.26%  0.51%  0.22%   1.36%  1.19%  4.17%  6.25%  10.00%  1.60%
                                                                  2                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.15%  0.00%   0.00%   0.00%  0.00%  0.27%  0.54%  0.43%   4.88%  0.82%  0.00%  0.00%   2.00%  1.58%
                                                                  3                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.16%  0.00%   0.00%   0.00%  0.08%  0.28%  0.92%  0.00%   5.00%  0.53%  0.00%  0.00%   0.00%  1.52%
                                                                  4                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.16%  0.00%   0.00%   0.00%  0.08%  0.45%  0.97%  0.90%   2.94%  0.52%  0.00%  0.00%   0.00%  1.39%
                                                                  5                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.21%   0.00%   0.00%  0.08%  0.16%  1.42%  0.00%   3.57%  0.60%  0.00%  0.00%   0.00%  1.14%
                                                                  6                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.22%   0.00%   0.00%  0.53%  0.00%  1.29%  0.00%   4.00%  0.63%  0.00%  0.00%   0.00%  0.88%
                                                                  7                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.23%   0.00%   0.00%  0.56%  0.19%  0.54%  1.12%   0.00%  0.66%  0.00%  0.00%   0.00%  0.68%
                                                                  8                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.28%  0.00%  0.00%   0.00%   0.29%  0.39%  0.21%  0.68%  0.00%   0.00%  0.86%  0.00%  0.00%   0.00%  0.49%
                                                                  9                 0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.29%  0.00%  0.00%   0.00%   0.31%  0.41%  0.46%  0.54%  0.00%   0.00%  0.68%  0.00%  0.00%   0.00%  0.47%
                                                                  10                0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.31%  0.00%  0.00%   0.00%   0.00%  0.67%  0.50%  0.59%  0.00%   0.00%  0.72%  0.00%  0.00%   0.00%  0.44%
                                                                  11                0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.33%  0.00%  0.00%   0.00%   0.00%  0.95%  0.27%  0.80%  0.00%   0.00%  0.55%  0.00%  0.00%   0.00%  0.33%
                                                                  12                0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.37%  0.00%  0.00%   0.00%   0.00%  1.01%  0.88%  0.35%  0.00%   0.00%  0.60%  0.00%  0.00%   0.00%  0.25%
                                                                  13                0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.41%  0.00%  0.00%   0.00%   0.00%  1.08%  0.96%  0.37%  0.00%   0.00%  0.65%  0.00%  0.00%   0.00%  0.25%
                                                                  14                0.00%  0.00%  0.00%  0.00%  0.00%         0.53%  0.00%  0.00%  0.00%   0.00%   0.00%  0.89%  1.06%  0.70%  0.00%   0.00%  0.55%  0.00%  0.00%   0.00%  0.29%
                                                                  15                0.00%  0.00%  0.00%  0.00%  0.00%         0.56%  0.00%  0.00%  0.00%   0.00%   0.00%  0.99%  0.00%  1.45%  0.00%   0.00%  0.60%  0.00%  0.00%   0.00%  0.33%
                                                                  16                0.00%  0.00%  0.00%  0.00%  0.00%         0.58%  0.00%  0.00%  0.00%   0.00%   0.00%  0.35%  0.00%  1.65%  0.00%   0.00%  0.88%  0.00%  0.00%   0.00%  0.29%
                                                                  17                0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.61%  0.00%  0.00%   0.00%   0.00%  1.15%  0.00%  0.74%  0.00%   0.00%  0.97%  0.00%  0.00%   0.00%  0.23%
                                                                  18                0.00%  0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.42%  0.00%   0.00%   0.00%  1.32%  0.00%  0.51%  0.00%   0.00%  0.92%  0.00%  0.00%   0.00%  0.13%
                                                                  19                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.43%   0.00%   0.00%  0.98%  0.68%  0.57%  0.00%   0.00%  1.05%  0.00%          0.00%  0.08%
                                                                  20                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.37%   0.00%  1.05%  0.82%  0.64%  0.00%   0.00%  1.03%  0.00%          0.00%  0.10%
                                                                  21                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%   2.04%  0.38%  1.00%  0.00%  0.00%   0.00%  1.61%  0.00%          0.00%  0.10%
                                                                  22                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%   0.00%  1.95%  0.79%  0.00%  0.00%   0.00%  1.53%                 0.00%  0.08%
                                                                  23                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%   3.95%  0.00%  0.00%  1.02%  0.00%   0.00%  1.96%                 0.00%  0.08%
                                                                  24                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%   4.55%  0.86%  0.00%  0.00%  0.00%  16.67%  0.00%                        0.17%
                                                                  25                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   2.84%   1.72%  0.00%  0.00%  0.00%  0.00%   0.00%  0.00%                        0.21%
                                                                  26                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   3.33%   0.00%  0.00%  0.00%  0.00%          0.00%  0.00%                        0.21%
                                                                  27                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   2.94%   0.00%  0.00%  0.00%  0.00%                                              0.25%
                                                                  28                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%   0.00%  5.56%  0.00%  0.00%                                              0.27%
                                                                  29                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%   0.00%  7.14%  0.00%  0.00%                                              0.29%
                                                                  30                       0.00%  0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%  14.29%  0.00%  0.00%  0.00%                                              0.20%
                                                                  31                              0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   0.00%  25.00%  0.00%  0.00%  0.00%                                              0.12%
                                                                  32                              0.00%  0.00%  0.00%         0.00%  0.00%  0.00%  0.00%   9.09%   0.00%  0.00%  0.00%  0.00%                                              0.13%
                                                                  33                              0.00%  0.00%  0.00%         0.00%  0.00%         0.00%  12.50%   0.00%  0.00%  0.00%  0.00%                                              0.15%
                                                                  34                              0.00%  0.00%  0.00%         0.00%  0.00%         0.00%  20.00%   0.00%  0.00%  0.00%  0.00%                                              0.17%
                                                                  35                                     0.00%  0.00%         0.00%  0.00%         0.00%  25.00%   0.00%  0.00%  0.00%  0.00%                                              0.19%
                                                                  36                                     0.00%  0.00%         0.00%                0.00%   0.00%   0.00%  0.00%  0.00%  0.00%                                              0.21%
                                                                  37                                     0.00%                0.00%                0.00%   0.00%   0.00%  0.00%  0.00%  0.00%                                              0.25%
                                                                  38                                     0.00%                0.00%                0.00%   0.00%   0.00%                0.00%                                              0.31%
                                                                  39                                                                                       0.00%                        0.00%                                              0.41%
                                                                  40                                                                                       0.00%                        0.00%                                              0.31%
28 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024  3.5.4 Cumulative default rates by credit rating

                                                                                          Table 15: Cumulative default rates by credit rating and year

                                                                                          During AAA  AA+  AA     AA-    A+     A      A-     BBB+ BBB BBB- BB+              BB      BB-     B+     B      B-     CCC+ CCC CCC-         CC     C      SD      NR
                                                                                          year

                                                                                          1                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.15%  0.00%   0.00%   0.00%  0.00%  0.26%  0.51%  0.22%   1.36%  1.19%  4.17%  6.25%  10.00%  1.60%
                                                                                          2                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.15%  0.00%   0.00%   0.00%  0.00%  0.27%  0.54%  0.43%   4.88%  0.82%  0.00%  0.00%   2.00%  1.58%
                                                                                          3                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.16%  0.00%   0.00%   0.00%  0.08%  0.28%  0.92%  0.00%   5.00%  0.53%  0.00%  0.00%   0.00%  1.52%
                                                                                          4                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.16%  0.00%   0.00%   0.00%  0.08%  0.45%  0.97%  0.90%   2.94%  0.52%  0.00%  0.00%   0.00%  1.39%
                                                                                          5                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.21%   0.00%   0.00%  0.08%  0.16%  1.42%  0.00%   3.57%  0.60%  0.00%  0.00%   0.00%  1.14%
                                                                                          6                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.22%   0.00%   0.00%  0.53%  0.00%  1.29%  0.00%   4.00%  0.63%  0.00%  0.00%   0.00%  0.88%
                                                                                          7                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.23%   0.00%   0.00%  0.56%  0.19%  0.54%  1.12%   0.00%  0.66%  0.00%  0.00%   0.00%  0.68%
                                                                                          8                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.28%  0.00%  0.00%   0.00%   0.29%  0.39%  0.21%  0.68%  0.00%   0.00%  0.86%  0.00%  0.00%   0.00%  0.49%
                                                                                          9                0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.29%  0.00%  0.00%   0.00%   0.31%  0.41%  0.46%  0.54%  0.00%   0.00%  0.68%  0.00%  0.00%   0.00%  0.47%
                                                                                          10               0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.31%  0.00%  0.00%   0.00%   0.00%  0.67%  0.50%  0.59%  0.00%   0.00%  0.72%  0.00%  0.00%   0.00%  0.44%
                                                                                          11               0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.33%  0.00%  0.00%   0.00%   0.00%  0.95%  0.27%  0.80%  0.00%   0.00%  0.55%  0.00%  0.00%   0.00%  0.33%
                                                                                          12               0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.37%  0.00%  0.00%   0.00%   0.00%  1.01%  0.88%  0.35%  0.00%   0.00%  0.60%  0.00%  0.00%   0.00%  0.25%
                                                                                          13               0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.41%  0.00%  0.00%   0.00%   0.00%  1.08%  0.96%  0.37%  0.00%   0.00%  0.65%  0.00%  0.00%   0.00%  0.25%
                                                                                          14               0.00%  0.00%  0.00%  0.00%  0.00%  0.53%     0.00%  0.00%  0.00%   0.00%   0.00%  0.89%  1.06%  0.70%  0.00%   0.00%  0.55%  0.00%  0.00%   0.00%  0.29%
                                                                                          15               0.00%  0.00%  0.00%  0.00%  0.00%  0.56%     0.00%  0.00%  0.00%   0.00%   0.00%  0.99%  0.00%  1.45%  0.00%   0.00%  0.60%  0.00%  0.00%   0.00%  0.33%
                                                                                          16               0.00%  0.00%  0.00%  0.00%  0.00%  0.58%     0.00%  0.00%  0.00%   0.00%   0.00%  0.35%  0.00%  1.65%  0.00%   0.00%  0.88%  0.00%  0.00%   0.00%  0.29%
                                                                                          17               0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.61%  0.00%  0.00%   0.00%   0.00%  1.15%  0.00%  0.74%  0.00%   0.00%  0.97%  0.00%  0.00%   0.00%  0.23%
                                                                                          18               0.00%  0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.42%  0.00%   0.00%   0.00%  1.32%  0.00%  0.51%  0.00%   0.00%  0.92%  0.00%  0.00%   0.00%  0.13%
                                                                                          19                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.43%   0.00%   0.00%  0.98%  0.68%  0.57%  0.00%   0.00%  1.05%  0.00%          0.00%  0.08%
                                                                                          20                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.37%   0.00%  1.05%  0.82%  0.64%  0.00%   0.00%  1.03%  0.00%          0.00%  0.10%
                                                                                          21                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%   2.04%  0.38%  1.00%  0.00%  0.00%   0.00%  1.61%  0.00%          0.00%  0.10%
                                                                                          22                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%   0.00%  1.95%  0.79%  0.00%  0.00%   0.00%  1.53%                 0.00%  0.08%
                                                                                          23                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%   3.95%  0.00%  0.00%  1.02%  0.00%   0.00%  1.96%                 0.00%  0.08%
                                                                                          24                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%   4.55%  0.86%  0.00%  0.00%  0.00%  16.67%  0.00%                        0.17%
                                                                                          25                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   2.84%   1.72%  0.00%  0.00%  0.00%  0.00%   0.00%  0.00%                        0.21%
                                                                                          26                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   3.33%   0.00%  0.00%  0.00%  0.00%          0.00%  0.00%                        0.21%
                                                                                          27                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   2.94%   0.00%  0.00%  0.00%  0.00%                                              0.25%
                                                                                          28                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%   0.00%  5.56%  0.00%  0.00%                                              0.27%
                                                                                          29                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%   0.00%  7.14%  0.00%  0.00%                                              0.29%
                                                                                          30                      0.00%  0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%  14.29%  0.00%  0.00%  0.00%                                              0.20%
                                                                                          31                             0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   0.00%  25.00%  0.00%  0.00%  0.00%                                              0.12%
                                                                                          32                             0.00%  0.00%  0.00%  0.00%     0.00%  0.00%  0.00%   9.09%   0.00%  0.00%  0.00%  0.00%                                              0.13%
                                                                                          33                             0.00%  0.00%  0.00%  0.00%     0.00%         0.00%  12.50%   0.00%  0.00%  0.00%  0.00%                                              0.15%
                                                                                          34                             0.00%  0.00%  0.00%  0.00%     0.00%         0.00%  20.00%   0.00%  0.00%  0.00%  0.00%                                              0.17%
                                                                                          35                                    0.00%  0.00%  0.00%     0.00%         0.00%  25.00%   0.00%  0.00%  0.00%  0.00%                                              0.19%
                                                                                          36                                    0.00%  0.00%  0.00%                   0.00%   0.00%   0.00%  0.00%  0.00%  0.00%                                              0.21%
                                                                                          37                                    0.00%         0.00%                   0.00%   0.00%   0.00%  0.00%  0.00%  0.00%                                              0.25%
                                                                                          38                                    0.00%         0.00%                   0.00%   0.00%   0.00%                0.00%                                              0.31%
                                                                                          39                                                                                  0.00%                        0.00%                                              0.41%
                                                                                          40                                                                                  0.00%                        0.00%                                              0.31%
4 Recovery rate statistics

Recovery rates are calculated individually for each default event of a country. According to the definition of
sovereign and sovereign-guaranteed lending, all loans extended by multilateral development banks (MDBs) to
a country are considered to default simultaneously and return to performing status on the same date. To date,
all defaults covered by the GEMs dataset have resulted in full recovery of overdue principal and interest on
a nominal basis. As a result, the only losses incurred stem from the cost of funding overdue interest, as these
amounts are neither capitalised nor charged to borrowers.

As detailed in Equation 9, the recovery rate is calculated as the ratio of:

     A. the discounted payments received between the start and resolution of a default event, plus

     B. the discounted value of the remaining outstanding principal immediately after resolution of the default
          event, divided by

     C. the nominal value of the outstanding principal and interest at the start of the default event.

Discounting is performed using the applicable lending rates, with values discounted back to the time of default.

Equation 9: Calculation of recovery rates (RR)

Where:

        D     = Start of default event

        R     = Resolution of default event

        i     = Numbered period for periods starting after D and ending with R

        Pmti  = Payment of principal or interest received during

        PrnR  = Remaining outstanding principal amount immediately after R

        dri   = Discount rate applicable to payments received during

        PrnD  = Outstanding principal amount at time of default (D)

        IntD  = Outstanding interest amount at time of default (D)

The average recovery rates presented in this publication are calculated as simple (unweighted) averages across
the relevant dimensions and categories. Confidence intervals around those averages are not provided, as the
recovery rates are not normally distributed. Instead, the results include ranges and selected percentiles to better
reflect the distribution. Recovery rates for unresolved default events are excluded from the calculations.

              Characteristics of sovereign and sovereign-guaranteed lending 29
4.1 Recovery rates by year of default

Table 16: Recovery rates by year of default

Year Defaults Recovery rate                   Year   Defaults Recovery rate
                                              2005
1984  1  86.7%                                2006
                                              2007
1985                                          2008   1                                    100.0%
                                              2009
1986  2  99.0%                                2010
                                              2011
1987  5  83.2%                                2012
                                              2013
1988  3  96.0%                                2014
                                              2015
1989  3  99.1%                                2016
                                              2017
1990  2  86.6%                                2018
                                              2019
1991  1  97.1%                                2020
                                              2021
1992  5  93.1%                                2022   1                                    100.0%
                                              2023
1993  3  94.0%                                2024
                                              Total
1994  1  98.4%

1995

1996

1997  1  97.0%                                       1                                    99.4%

1998  2  96.3%

1999  1  98.8%

2000  3  99.0%

2001  3  97.6%                                       1                                    99.6%

2002  1  98.3%                                       1                                    99.6%

2003  2  99.0%                                       1                                    100.0%

2004  1  98.1%                                       46                                   95.1%

Figure 15: Recovery rates by year of default

30 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
4.2 Recovery rates by region

4.2.1 Recovery rates by World Bank region

The regional classification of countries used in this section follows the World Bank Group's framework. The
GEMs dataset does not currently contain any observations for recovery rates of countries in South Asia.

Table 17: Recovery rates by World Bank region

World Bank region            Unique    Default     Average    Minimum        10th        25th     Median  75th   90th    Maximum
                            countries  events      recovery  observation  Percentile  Percentile
                                                                                                          Percentile Percentile observation
                                                3     rate
                                                3
East Asia & Pacific         3                 14   95.4%     93.1%        93.1%       93.1%       93.1%   96.6%   98.6%  100.0%
                                                3                                                 95.3%   96.0%   96.4%   96.7%
Europe & Central Asia       3                      88.4%     73.3%        77.7%       84.3%       98.5%   99.8%  100.0%  100.0%
                                                                                                  79.1%   89.5%   95.8%  100.0%
Latin America & Caribbean   8                      97.4%     86.7%        94.7%       96.2%

Middle East & North Africa  3                      84.4%     74.1%        75.1%       76.6%

South Asia

Sub-Saharan Africa          13         23          95.8%     47.1%        92.8%       97.1%       98.4%   99.9%  100.0%  100.0%
                                                                                                  98.1%   99.8%  100.0%  100.0%
Overall                     30         46          95.1% 47.1% 88.5% 95.6%

Figure 16: Recovery rates by World Bank region

                                                             Characteristics of sovereign and sovereign-guaranteed lending 31
4.2.2 Recovery rates by continent

Table 18 and Figure 17 present recovery rates by continent.

Table 18: Recovery rates by continent

Continent       Unique      Default     Average    Minimum        10th        25th     Median  75th   90th    Maximum
               countries    events      recovery  observation  Percentile  Percentile
Africa                                                                                         Percentile Percentile observation
Asia                    13         23      rate
Europe                   4           4
North America            3           3  95.8%     47.1%        92.8%       97.1%       98.4%   99.9%  100.0%  100.0%
Oceania                  5           8                                                 86.1%   94.8%   97.9%  100.0%
South America            2           2  86.6%     74.1%        75.6%       77.8%       95.3%   96.0%   96.4%   96.7%
                         3           6                                                 98.5%   99.6%   99.8%  100.0%
 Overall                                88.4%     73.3%        77.7%       84.3%       96.5%   98.3%   99.3%  100.0%
                        30         46                                                  98.9%   99.9%   99.9%  100.0%
                                        96.6%     86.7%        92.1%       95.3%
                                                                                       98.1%   99.8%  100.0%  100.0%
                                        96.5%     93.1%        93.8%       94.8%

                                        98.5%     95.7%        96.7%       97.7%

                                        95.1% 47.1% 88.5% 95.6%

Figure 17: Recovery rates by continent

32 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
4.3 Recovery rates by income group

Country income group classifications for the year of each default are based on the World Bank Group's
historical income group database. Five countries in the dataset were not classified by the World Bank Group
at the time of their defaults. The GEMs dataset does not currently contain any observations for recovery rates
of high-income countries.

Table 19: Recovery rates by income group

Income group at time of   Unique Default   Average    Minimum        10th        25th     Median  75th   90th  Maximum
default                  countries events  recovery  observation  Percentile  Percentile
                                                                                                  Percentile Percentile observation
High income                                   rate
Upper middle income
Lower middle income      6   8             96.0%     74.1%        90.2%       98.0%       99.2% 100.0% 100.0% 100.0%
Low income
Not available            13  18            96.6%     79.1%        93.6%       95.6%       97.8%   99.7% 100.0% 100.0%
 Overall
                         10  15            94.4%     47.1%        91.5%       96.9%       98.1%   99.9% 100.0% 100.0%

                         5   5             90.2%     73.3%        78.7%       86.7%       93.1%   97.9%  99.2% 100.0%

                         30  46            95.1% 47.1% 88.5% 95.6% 98.1% 99.8% 100.0% 100.0%

Figure 18: Recovery rates by income group

                                                     Characteristics of sovereign and sovereign-guaranteed lending 33
5 Rating migration rate statistics

The rating migrations presented in this publication are based on GEMs ratings assigned to countries, as
described in Section 3.4. Only years in which a country has exposure to at least one multilateral development
bank (MDB) are included. Rating migrations are captured as annual snapshots taken on 1 January of each
year over the 41-year observation period. For example, the one-year migration rates compare a country's
rating in year i to its ratings in year i + 1. Intra-year rating changes are not considered.
In addition to the GEMs ratings shown in migration tables by rating categories  aligned with external
rating categories  the SD category in Table 20 signifies countries' defaults to lenders except MDBs, such as
commercial banks or investors in bond issuances. Table 21 displays the migrations in and out of non-accrual
status, which reflects defaults to MDBs. Since countries eventually come out of non-accrual status, it is not
considered an absorbing state, and so the migration table includes countries' transitions from non-accrual
back to performing ratings.

5.1 Annual upgrade vs. downgrade ratio

Figure 19 shows the yearly credit rating upgrades and downgrades of countries in the GEMs dataset.
Transitions into and out of the NR category are excluded from the calculation, as they do not reflect changes in
creditworthiness. This exclusion also explains the limited rating changes in earlier years, when many countries
in the dataset were still unrated.
The ratio of the yearly rating changes has been calculated as the difference in the number of upgrades and
downgrades over the total number of rating changes.
Figure 19: Annual upgrade vs. downgrade ratio

34 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024
                                                                  5.2 Rating migration rates

                                                                  Table 20: One-year rating migration rates

                                                                  From/to Observations AAA  AA+ AA AA- A+          A           A- BBB+ BBB BBB- BB+ BB BB- B+                B     B- CCC+ CCC CCC- CC     C         SD     Not
                                                                                                                                                                                                                           rated

                                                                     AAA       0            87.5% 12.5%
                                                                     AA+       0
                                                                      AA       8            5.1% 79.5% 10.3%                   2.6%                                    2.6%
                                                                     AA-      39
                                                                      A+      52                             17.3% 73.1% 9.6%
                                                                              106
                                                                       A      145                                  10.4% 80.2% 5.7%  1.9% 0.9% 0.9%
                                                                      A-      119
                                                                    BBB+      170                                  13.1% 79.3% 4.8% 2.8%
                                                                     BBB      221
                                                                     BBB-     184                                              15.1% 73.1% 11.8%
                                                                     BB+      194
Characteristics of sovereign and sovereign-guaranteed lending 35      BB      244                                              1.2% 14.7% 71.8% 8.8% 2.4% 0.6%               0.6%
                                                                     BB-      359
                                                                      B+      389                                                    0.5% 12.7% 75.6% 8.1% 1.4%        0.5% 0.5% 0.5%                0.5%
                                                                       B      421
                                                                      B-      149                                                    1.6% 17.4% 69.6% 6.5% 3.3% 1.1%               0.5%
                                                                    CCC+      43
                                                                     CCC      615                                                                 1.0% 15.5% 70.1% 9.3% 2.1% 1.0%              0.5%                        0.5%
                                                                     CCC-     12
                                                                      CC      16                                                                  1.2% 0.8% 9.8% 69.3% 13.5% 3.3% 1.2%                               0.8%
                                                                       C      25
                                                                      SD     1 378                                                                      0.3% 1.4% 10.0% 73.5% 10.0% 4.2% 0.6%
                                                                  Not rated
                                                                                                                                                  0.8%           2.8% 10.8% 70.7% 8.2% 4.1% 0.5% 1.0% 0.3% 0.3% 0.5%

                                                                                                                                                                 1.0% 2.9% 8.3% 76.2% 3.3% 1.9% 5.5% 0.5%            0.2% 0.2%

                                                                                                                                                  0.7%           0.7%        8.7% 12.8% 61.1% 9.4% 5.4%              1.3%

                                                                                                                                                                             4.7% 7.0% 30.2% 34.9% 4.7% 4.7% 7.0% 7.0%

                                                                                                                                                        0.2% 0.3% 0.7% 1.6% 4.6% 1.5% 0.5% 89.4% 0.3% 0.2% 0.5% 0.3%

                                                                                                                                                                                   8.3% 16.7% 8.3% 25.0% 33.3% 8.3%

                                                                                                                                                                                   12.5% 6.3% 12.5% 18.8%  43.8% 6.3%

                                                                                                                                                                                   4.0% 8.0% 8.0% 8.0% 12.0% 8.0% 52.0%

                                                                                                             0.1%  0.1% 0.4% 0.1% 0.3% 0.7% 0.4% 1.1% 0.8% 0.7% 0.7% 0.9% 0.3%                       1.8%  0.1% 0.1% 91.5%
36 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024  Table 21 provides a separate migration matrix for movements of countries into and out of non-accrual status as this status is not available in external rating scales.

                                                                                          Table 21: One-year rating migration into and out of non-accrual status

                                                                                          From/to Observations AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+       B  B- CCC+ CCC CCC- CC  C  SD   Non- Not
                                                                                                                                                                                                       accrual rated

                                                                                          AAA          0

                                                                                              AA+        0                                                        0.3%  0.6% 0.6%  4.2%                0.0%
                                                                                               AA        8                                                                                             0.0%
                                                                                               AA-      39                                                                                             0.0%
                                                                                               A+       52                                                                                             0.0%
                                                                                                A       106                                                                                            0.0%
                                                                                                A-      145                                                                                            0.0%
                                                                                              BBB+      119                                                                                            0.0%
                                                                                               BBB      170                                                                                            0.2%
                                                                                              BBB-      221                                                                                            0.0%
                                                                                               BB+      184                                                                                            0.0%
                                                                                               BB       194                                                                                            0.0%
                                                                                               BB-      244                                                                                            0.0%
                                                                                               B+       359                                                                                            0.3%
                                                                                                B       389                                                                                            0.5%
                                                                                                B-      421                                                                                            0.2%
                                                                                              CCC+      149                                                                                            1.4%
                                                                                               CCC      43                                                                                             1.2%
                                                                                              CCC-      615                                                                                            4.2%
                                                                                               CC       12                                                                                             6.3%
                                                                                                C       16                                                                                             10.0%
                                                                                               SD       25                                                                                             89.1% 5.1%
                                                                                          Non-accrual   331                                                                                            1.6%
                                                                                           Not rated   1 378
                                                                  Figure 20 illustrates the evolution of GEMs ratings for countries during the five years leading to a non-accrual event. Only the ratings for countries that entered non-
                                                                  accrual status are included.

                                                                  Figure 20: Five-year rating migration to default

Characteristics of sovereign and sovereign-guaranteed lending 37
38 Default and recovery statistics: Sovereign and sovereign-guaranteed lending 1984-2024  Table 22: Two-year rating migration rates

                                                                                          From/to Observations AAA  AA+ AA AA- A+          A            A- BBB+ BBB BBB- BB+ BB BB- B+            B  B- CCC+ CCC CCC- CC         C      SD       Not
                                                                                                                                                                                                                                                rated

                                                                                             AAA       0            75.0% 12.5%                         12.5%
                                                                                             AA+       0
                                                                                              AA       8            10.5% 57.9% 26.3%                          2.6%        2.6%
                                                                                             AA-      38
                                                                                              A+      49                             30.6% 46.9% 18.4%                     2.0%           2.0%
                                                                                                      100
                                                                                               A      144                            1.0% 21.0% 61.0% 8.0%     6.0% 1.0% 1.0% 1.0%
                                                                                              A-      115
                                                                                            BBB+      162                                  0.7% 20.8% 66.0% 7.6% 3.5% 0.7% 0.7%
                                                                                             BBB      216
                                                                                             BBB-     177                                  3.5% 20.9% 57.4% 14.8% 3.5%
                                                                                             BB+      189
                                                                                              BB      235                                               4.9% 17.3% 57.4% 12.3% 5.6% 1.9%                        0.6%
                                                                                             BB-      343
                                                                                              B+      375                                               0.9% 4.6% 18.5% 56.5% 11.6% 1.9% 1.9% 0.5% 0.9% 1.4%          0.9%                      0.5%
                                                                                               B      399
                                                                                              B-      137                                                      0.6% 4.5% 26.0% 50.3% 10.2% 4.5% 2.3% 0.6% 1.1%
                                                                                            CCC+      41
                                                                                             CCC      593                                                            5.8% 22.2% 49.7% 13.8% 5.8%     1.1%             0.5% 0.5%                 0.5%
                                                                                             CCC-      7
                                                                                              CC      16                                                             2.1% 2.1% 14.0% 49.8% 19.1% 7.7% 3.0% 0.4% 0.4%                    1.3%
                                                                                               C      25
                                                                                              SD     1 374                                                     0.3%        0.9% 3.2% 13.4% 57.1% 15.5% 6.1% 1.2% 0.9% 1.2% 0.3%
                                                                                          Not rated
                                                                                                                                                                     1.1%        0.5% 5.3% 13.9% 53.3% 14.9% 4.8% 1.6% 1.9% 0.5% 1.1% 1.1%

                                                                                                                                                                                          2.0% 7.5% 11.5% 58.9% 6.3% 2.8% 8.5% 0.5% 0.3% 1.3% 0.5%

                                                                                                                                                                     0.7%                 0.7% 0.7% 16.8% 18.2% 43.1% 9.5% 6.6% 0.7% 1.5% 1.5%

                                                                                                                                                                                                  12.2% 9.8% 31.7% 14.6% 9.8% 7.3% 4.9% 9.8%

                                                                                                                                                                                 0.2% 0.7% 1.3% 2.9% 9.1% 2.2% 0.3% 82.0% 0.3%          0.3% 0.7%

                                                                                                                                                                                                  14.3% 14.3% 28.6% 14.3% 14.3%  14.3%

                                                                                                                                                                                                  6.3% 6.3% 18.8% 18.8% 25.0%    18.8% 6.3%

                                                                                                                                                                                                  4.0% 8.0% 16.0% 4.0% 20.0% 12.0% 8.0% 28.0%

                                                                                                                                     0.1%  0.3% 0.7% 0.4% 0.5% 1.3% 0.9% 2.0% 1.5% 1.6% 1.4% 1.6% 0.7%                3.6%       0.1% 0.1% 83.2%
                                                                  Table 23: Ten-year rating migration rates

                                                                  From/to Observations AAA AA+ AA AA- A+            A     A- BBB+ BBB BBB- BB+ BB BB- B+                        B  B- CCC+ CCC CCC- CC             C     SD     Not
                                                                                                                                                                                                                               rated

                                                                     AAA       0                             37.5%  25.0% 25.0% 12.5%
                                                                     AA+       0
                                                                      AA       8    3.8% 11.5% 26.9% 46.2%                      3.8% 3.8%           3.8%
                                                                     AA-      26
                                                                      A+      32    9.4% 6.3% 31.3% 21.9% 18.8% 3.1% 6.3%                                  3.1%
                                                                              79
                                                                       A      109   7.6% 12.7% 20.3% 3.8% 16.5% 5.1% 2.5% 1.3% 11.4% 3.8% 5.1% 6.3% 2.5%                                  1.3%
                                                                      A-      82
                                                                    BBB+      109   0.9% 2.8% 9.2% 9.2% 11.0% 33.0% 9.2% 6.4% 9.2% 8.3% 0.9%
                                                                     BBB      154
                                                                     BBB-     133                            3.7% 8.5% 11.0% 12.2% 23.2% 12.2% 12.2% 9.8%         6.1% 1.2%
                                                                     BB+      143
                                                                      BB      153                                   0.9% 9.2% 8.3% 15.6% 21.1% 13.8% 3.7% 4.6% 5.5% 7.3% 2.8% 1.8% 0.9% 0.9% 2.8%                  0.9%
                                                                     BB-      224
                                                                      B+      202                                   0.6% 5.2% 5.8% 10.4% 14.9% 21.4% 13.6% 8.4% 5.8% 8.4% 1.9% 0.6% 2.6%
                                                                       B      226
Characteristics of sovereign and sovereign-guaranteed lending 39      B-      75                                    2.3% 6.0% 6.0% 8.3% 18.8% 12.0% 9.8% 8.3% 9.0% 3.0% 8.3% 6.0% 2.3%
                                                                    CCC+      15
                                                                     CCC      407                                   0.7% 0.7% 4.9% 13.3% 16.8% 12.6% 18.2% 3.5% 17.5% 3.5% 4.9% 1.4% 0.7%                                      1.4%
                                                                     CCC-      4
                                                                      CC       7                                          0.7% 0.7% 10.5% 5.2% 5.9% 13.1% 11.8% 15.0% 9.8% 10.5% 7.8% 4.6% 2.6%                    0.7% 1.3%
                                                                       C      14
                                                                      SD     1 339                                  0.4%               2.2% 4.9% 3.1% 3.6% 8.5% 26.3% 20.1% 13.8% 4.0% 2.7% 1.8% 2.2% 1.3% 4.5% 0.4%
                                                                  Not rated
                                                                                                                          0.5%         2.0% 4.5% 0.5% 3.0% 9.9% 17.8% 26.2% 16.3% 5.0% 2.5% 5.4% 1.0% 2.0% 3.5%

                                                                                                                                       0.4% 2.2% 2.2% 1.8% 13.7% 12.8% 13.7% 23.9% 4.9% 1.8% 17.3% 0.4% 0.4% 3.1% 1.3%

                                                                                                                                       1.3%         1.3% 4.0% 5.3% 2.7% 25.3% 34.7% 17.3% 1.3% 5.3%                      1.3%

                                                                                                                                6.7%                                     20.0% 6.7% 6.7% 6.7% 6.7% 33.3% 13.3%

                                                                                                                                       0.2%                       4.9% 7.4% 10.6% 21.9% 3.4% 2.7% 46.2% 0.5% 1.5%              0.7%

                                                                                                                                                                  25.0%                         25.0% 25.0% 25.0%

                                                                                                                                             14.3%         14.3%         14.3%     42.9%        14.3%

                                                                                                                                                                  7.1% 14.3% 7.1% 14.3% 21.4%   28.6%              7.1%

                                                                                                             0.3% 0.6% 1.8% 2.5% 1.5% 1.7% 4.7% 4.3% 5.1% 4.7% 7.7% 7.2% 7.1% 3.1% 0.5% 14.9% 0.1% 0.1% 0.4% 31.8%
DEFAULT AND RECOVERY STATISTICS

SOVEREIGN AND
SOVEREIGN-GUARANTEED
LENDING
1984-2024

European Investment Bank
98-100, boulevard Konrad Adenauer
L-2950 Luxembourg
+352 4379-1
www.eib.org  info@eib.org

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pdf: QH-01-25-043-EN-N ISBN 978-92-861-6012-7 doi:10.2867/2100745
