Amid Nuclear Standoff, Frozen North Korea Debt Untradeable Due to Sanctions

Once seen as an opportunity for investors to position themselves for a future North Korean turnaround, the country's rarely traded defaulted debt may move further into the twilight zone after new sanctions were imposed this week on Pyongyang, the International New York Times reported on a Reuters story. Debt from North Korea - probably the most isolated of the frontier markets - has already been frozen for years as the secretive nation faces the most stringent sanctions regime in the world. It is part of a highly opaque market in the legacy debts of countries isolated from the rest of the international community, such as pre-Castro Cuban debt. North Korea has syndicated loans with a face value of around $1 billion, tied to loans in default since the 1980s. It has not undertaken any restructuring with its creditors. The debt was repackaged in 1997 into a special vehicle called NK Debt Corporation by French bank BNP, making it into transferable securities. Read more. (Subscription required.)
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