Troubled sovereign loans to less developed countries are usually rescheduled rather than declared in default.

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Sovereign loans to less developed countries are often rescheduled rather than declared in default because declaring a default could lead to a loss of access to international capital markets for the borrower and significant financial losses for the lenders. Rescheduling allows for the adjustment of loan terms to make repayment more manageable for the borrowing country.

Troubled Sovereign Loans to Less Developed Countries Are Usually Rescheduled