Assume thatsalesdouble, the firmoperateswith positive working capital position and thecommitments from currentcreditorsdo notincrease. Whatscenariodo youforesee?
In debt exchanges, companies typically ask creditors to swap current debt for equity, new debt with a lesser value that matures later, or a combination of the two.
Japan would, indeed, become more exposed to foreign creditors if the current account were to slide into deficit, but that is unlikely unless the world economy takes a turn for the worse and oil prices soar two things which are unlikely to happen simultaneously.
The bondholders are protected from the bankruptcy filing, but unsecured creditors and especially city employees, both current and retirees, will suffer most.