Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

Unconventional mechanism of stabilization of a tetragonal phase in the perovskite ferroelectric (PbTiO3)(1-x)(BiFeO3)(x)

Temperature-dependent x-ray powder-diffraction study of the tetragonal compositions of PbTiO3-BiFeO3 series has revealed that, unlike for all the known ferroelectric perovskites, the compositions exhibiting giant tetragonality is stabilized from the cubic phase via a complex transition pathway which involve (i) formation of minor monoclinic phase with a large pseudotetragonality along with an intermediate tetragonal phase (major) with a small tetragonality, (ii) gradual vanishing of the intermediate tetragonal phase and concomitant increase in the monoclinic regions, and finally (iii) gradual transformation of the monoclinic phase to the tetragonal phase with giant tetragonality.The system seems to adopt such a complex transition pathway to create amicrostructure with very large number of domains and interfaces for stress relief, which would not have been possible in case of a direct cubic-tetragonal transition.

Hydropower Project Design Incorporating Submergence Costs

Submergence of land is a major impact of large hydropower projects. Such projects are often also dogged by siltation, delays in construction and heavy debt burdens-factors that are not considered in the project planning exercise. A simple constrained optimization model for the benefit~ost analysis of large hydropower projects that considers these features is proposed. The model is then applied to two sites in India. Using the potential productivity of an energy plantation on the submergible land is suggested as a reasonable approach to estimating the opportunity cost of submergence. Optimum project dimensions are calculated for various scenarios. Results indicate that the inclusion of submergence cost may lead to a substanual reduction in net present value and hence in project viability. Parameters such as project lifespan, con$truction time, discount rate and external debt burden are also of significance. The designs proposed by the planners are found to be uneconomic, whIle even the optimal design may not be viable for more typical scenarios. The concept of energy opportunity cost is useful for preliminary screening; some projects may require more detailed calculations. The optimization approach helps identify significant trade-offs between energy generation and land availability.

Mechanisms of azole resistance and carcinogenic acetaldehyde production in chronic mucosal candidosis

Autoimmune polyendocrinopathy-candidiasis-ectodermal dystrophy (APECED, APS1) is an autoimmune disease caused by a loss-of function mutation in the autoregulator gene (AIRE). Patients with APECED suffer from chronic mucocutaneous candidosis (CMC) of the oral cavity and oesophagus often since early childhood. The patients are mainly colonized with Candida albicans and decades of exposure to antifungal agents have lead to the development of clinical and microbiological resistance in the treatment of CMC in the APECED patient population in Finland. A high incidence of oral squamous cell carcinoma is associated with oral CMC lesions in the APECED patients over the age of 25. The overall aim of this study was firstly, to investigate the effect of long-term azole exposure on the metabolism of oral C. albicans isolates from APECED patients with CMC and secondly, to analyse the specific molecular mechanisms that are responsible for these changes. The aim of the first study was to examine C. albicans strains from APECED patients and the level of cross-resistance to miconazole, the recommended topical compound for the treatment of oral candidosis. A total of 16% of the strains had decreased susceptibility to miconazole and all of these isolates had decreased susceptibility to fluconazole. Miconazole MICs also correlated with MICs to voriconazole and posaconazole. A significant positive correlation between the years of miconazole exposure and the MICs to azole antifungal agents was also found. These included azoles the patients had not been exposed to. The aim of our second study was to determine if the APECED patients are continuously colonized with the same C. albicans strains despite extensive antifungal treatment and to gain a deeper insight into the genetic changes leading to azole resistance. The strains were typed using MLST and our results confirmed that all patients were persistently colonized with the same or a genetically related strain despite antifungal treatment between isolations. No epidemic strains were found. mRNA expression was analysed by Northern blotting, protein level by western blotting, and TAC1 and ERG11 genes were sequenced. The main molecular mechanisms resulting in azole resistance were gain-of-function mutations in TAC1 leading to over expression of CDR1 and CDR2, genes linked to azole resistance. Several strains had also developed point mutations in ERG11, another gene linked to azole resistance. In the third study we used gas chromatography to test whether the level of carcinogenic acetaldehyde produced by C. albicans strains isolated from APECED patients were different from the levels produced by strains isolated from healthy controls and oral carcinoma patients. Acetaldehyde is a carcinogenic product of alcohol fermentation and metabolism in microbes associated with cancers of the upper digestive tract. In yeast, acetaldehyde is a by-product of the pyruvate bypass that converts pyruvate into acetyl-CoA during fermentation. Our results showed that strains isolated from APECED patients produced mutagenic levels of acetaldehyde in the presence of glucose (100mM, 18g/l) and the levels produced were significantly higher than those from strains isolated from controls and oral carcinoma patients. All strains in the study, however, were found to produce mutagenic levels of acetaldehyde in the presence of ethanol (11mM). The glucose and ethanol levels used in this study are equivalent to those found in food and beverages and our results highlight the role of dietary sugars and ethanol on carcinogenesis. The aims of our fourth study were to research the effect of growth conditions in the levels of acetaldehyde produced by C. albicans and to gain deeper insight into the role of different genes in the pyruvate-bypass in the production of high acetaldehyde levels. Acetaldehyde production in the presence of glucose increased by 17-fold under moderately hypoxic conditions compared to the levels produced under normoxic conditions. Under moderately hypoxic conditions acetaldehyde levels did not correlate with the expression of ADH1 and ADH2, genes catalyzing the oxidation of ethanol to acetaldehyde, or PDC11, the gene catalyzing the oxidation of pyruvate to acetaldehyde but correlated with the expression of down-stream genes ALD6 and ACS1. Our results highlight a problem where indiscriminate use of azoles may influence azole susceptibility and lead to the development of cross-resistance. Despite clinically successful treatment leading to relief of symptoms, colonization by C. albicans strains is persistent within APECED patients. Microevolution and point mutations that occur in strains may lead to the development of azole-resistant isolates and metabolic changes leading to increased production of carcinogenic acetaldehyde.

High-risk patients and high-risk grafts in infrainguinal bypass for critical limb ischaemia

The main purpose of revascularization procedures for critical limb ischaemia (CLI) is to preserve the leg and sustain the patient s ambulatory status. Other goals are ischaemic pain relief and healing of ischaemic ulcers. Patients with CLI are usually old and have several comorbidities affecting the outcome. Revascularization for CLI is meaningless unless both life and limb are preserved. Therefore, the knowledge of both patient- and bypass-related risk factors is of paramount importance in clinical decision-making, patient selection and resource allocation. The aim of this study was to identify patient- and graft-related predictors of impaired outcome after infrainguinal bypass for CLI. The purpose was to assess the outcome of high-risk patients undergoing infrainguinal bypass and to evaluate the usefulness of specific risk scoring methods. The results of bypasses in the absence of optimal vein graft material were also evaluated, and the feasibility of the new method of scaffolding suboptimal vein grafts was assessed. The results of this study showed that renal insufficiency - not only renal failure but also moderate impairment in renal function - seems to be a significant risk factor for both limb loss and death after infrainguinal bypass in patients with CLI. Low estimated GFR (PIENEMPI KUIN 30 ml/min/1.73 m2) is a strong independent marker of poor prognosis. Furthermore, estimated GFR is a more accurate predictor of survival and leg salvage after infrainguinal bypass in CLI patients than serum creatinine level alone. We also found out that the life expectancy of octogenarians with CLI is short. In this patient group endovascular revascularization is associated with a better outcome than bypass in terms of survival, leg salvage and amputation-free survival especially in presence of coronary artery disease. This study was the first one to demonstrate that Finnvasc and modified Prevent III risk scoring methods both predict the long-term outcome of patients undergoing both surgical and endovascular infrainguinal revascularization for CLI. Both risk scoring methods are easy to use and might be helpful in clinical practice as an aid in preoperative patient selection and decision-making. Similarly than in previous studies, we found out that a single-segment great saphenous vein graft is superior to any other autologous vein graft in terms of mid-term patency and leg salvage. However, if optimal vein graft is lacking, arm vein conduits are superior to prosthetic grafts especially in infrapopliteal bypasses for CLI. We studied also the new method of scaffolding suboptimal quality vein grafts and found out that this method may enable the use of vein grafts of compromised quality otherwise unsuitable for bypass grafting. The remarkable finding was that patients with the combination of high operative risk due to severe comorbidities and risk graft have extremely poor survival, suggesting that only relatively fit patients should undergo complex bypasses with risk grafts. The results of this study can be used in clinical practice as an aid in preoperative patient selection and decision-making. In the future, the need of vascular surgery will increase significantly as the elderly and diabetic population increases, which emphasises the importance of focusing on those patients that will gain benefit from infrainguinal bypass. Therefore, the individual risk of the patient, ambulatory status, outcome expectations, the risk of bypass procedure as well as technical factors such as the suitability of outflow anatomy and the available vein material should all be assessed and taken into consideration when deciding on the best revascularization strategy.

Blade manipulators in turbulent channel flow

We report here the results of a series of careful experiments in turbulent channel flow, using various configurations of blade manipulators suggested as optimal in earlier boundary layer studies. The mass flow in the channel could be held constant to better than 0.1%, and the uncertainties in pressure loss measurements were less than 0.1 mm of water; it was therefore possible to make accurate estimates of the global effects of blade manipulation of a kind that are difficult in boundary layer flows. The flow was fully developed at the station where the blades were mounted, and always relaxed to the same state sufficiently far downstream. It is found that, for a given mass flow, the pressure drop to any station downstream is always higher in the manipulated than in the unmanipulated flow, demonstrating that none of the blade manipulators tried reduces net duct losses. However the net increase in duct losses is less than the drag of the blade even in laminar flow, showing that there is a net reduction in the total skin friction drag experienced by the duct, but this relief is only about 20% of the manipulator drag at most.

Buckling patterns in diamond-like carbon films

An optical microscopy study of stress relief patterns in diamond-like carbon films is presented. Interesting stress relief patterns are observed which include the well-known sinusoidal type, branching pattern and string-of-beads pattern. The last one is shown to relieve stresses under marginal conditions. Two new stress relief patterns are noted in the present study. One of them is of sinusoidal shape with two extra branches at every peak position. The distribution of different stress relief forms from the outer edge of the films towards the interior is markedly dependent on the film thickness. Our new patterns support the approach in which the stress relief forms have been analysed earlier using the theory of plate buckling.

The State and Fate of Himalayan Glaciers

Himalayan glaciers are a focus of public and scientific debate. Prevailing uncertainties are of major concern because some projections of their future have serious implications for water resources. Most Himalayan glaciers are losing mass at rates similar to glaciers elsewhere, except for emerging indications of stability or mass gain in the Karakoram. A poor understanding of the processes affecting them, combined with the diversity of climatic conditions and the extremes of topographical relief within the region, makes projections speculative. Nevertheless, it is unlikely that dramatic changes in total runoff will occur soon, although continuing shrinkage outside the Karakoram will increase the seasonality of runoff, affect irrigation and hydropower, and alter hazards.

Micromechanisms of damage nucleation during contact deformation of columnar multilayer nitride coatings

In order to resolve some missing micromechanistic details regarding contact deformation in nitride multilayer coatings we report here observations from cross-sectional transmission electron microscopy and focused ion beam studies of the Vickers indentations on TiN/TiAlN multilayer films of various total thicknesses as well as bilayer periods. The study of damage induced by contact deformation in a nitride multilayer coating is complemented by stress calculated using an analytical model. Kinked boundaries of sliding columns give rise to cracks which propagate at an angle to the indentation axis under a combination of compressive and shear stresses. It is seen that multilayers provide more distributed columnar sliding, thereby reducing the stress intensity factor for shear cracking, while interfacial dislocations provide a stress relief mechanism by enabling lateral movement of material. (C) 2012 Acta Materialia Inc. Published by Elsevier Ltd. All rights reserved.

Heterogeneous locational optimisation using a generalised Voronoi partition

In this paper a generalisation of the Voronoi partition is used for locational optimisation of facilities having different service capabilities and limited range or reach. The facilities can be stationary, such as base stations in a cellular network, hospitals, schools, etc., or mobile units, such as multiple unmanned aerial vehicles, automated guided vehicles, etc., carrying sensors, or mobile units carrying relief personnel and materials. An objective function for optimal deployment of the facilities is formulated, and its critical points are determined. The locally optimal deployment is shown to be a generalised centroidal Voronoi configuration in which the facilities are located at the centroids of the corresponding generalised Voronoi cells. The problem is formulated for more general mobile facilities, and formal results on the stability, convergence and spatial distribution of the proposed control laws responsible for the motion of the agents carrying facilities, under some constraints on the agents' speed and limit on the sensor range, are provided. The theoretical results are supported with illustrative simulation results.

A prototype of a first-responder indoor localization system

In this paper we present an approach to build a prototype. model of a first-responder localization system intended for disaster relief operations. This system is useful to monitor and track the positions of the first-responders in an indoor environment, where GPS is not available. Each member of the first responder team is equipped with two zero-velocity-update-aided inertial navigation systems, one on each foot, a camera mounted on a helmet, and a processing platform strapped around the waist of the first responder, which fuses the data from the different sensors. The fusion algorithm runs real-time on the processing platform. The video is also processed using the DSP core of the computing machine. The processed data consisting of position, velocity, heading information along with video streams is transmitted to the command and control system via a local infrastructure WiFi network. A centralized cooperative localization algorithm, utilizing the information from Ultra Wideband based inter-agent ranging devices combined with the position estimates and uncertainties of each first responder, has also been implemented.

Analysis of Annular Plug Nozzle Flowfield

The flowfields associated with truncated annular plug nozzles of varying lengths are studied both experimentally and using computational tools. The nozzles are designed to observe wake structure transition for the range of pressure ratios considered. A classification of the open wake regime is proposed for comparing and analyzing the plug flowfields. The three-dimensional relief experienced by the annular plug flow leads to greater wave interactions on the plug surface as compared with linear plug flow, resulting in a delayed transition of the base wake. The Reynolds averaged Navier-Stokes based solvers employed in the studies could predict the plug surface flow accurately, whereas they exhibited limitations with regard to plug base flow predictions. Based on the experimental data generated, an empirical model for predicting closed wake base pressure is proposed and compared with other models available in literature.

Microstructure Development, Nanomechanical, and Dynamic Compression Properties of Spark Plasma Sintered TiB2-Ti-Based Homogeneous and Bi-layered Composites

The growing threats due to increased use of small-caliber armor piercing projectiles demand the development of new light-weight body armor materials. In this context, TiB2 appears to be a promising ceramic material. However, poor sinterability and low fracture toughness remain two major issues for TiB2. In order to address these issues together, Ti as a sinter-aid is used to develop TiB2-(x wt pct Ti), (x = 10, 20) homogeneous composites and a bi-layered composite (BLC) with each layer having Ti content of 10 and 20 wt pct. The present study uniquely demonstrates the efficacy of two-stage spark plasma sintering route to develop dense TiB2-Ti composites with an excellent combination of nanoscale hardness (similar to 36 GPa) and indentation fracture toughness (similar to 12 MPa m(1/2)). In case of BLC, these properties are not compromised w.r.t. homogeneous composites, suggesting the retention of baseline material properties even in the bi-layer design due to optimal relief of residual stresses. The better indentation toughness of TiB2-(10 wt pct Ti) and TiB2-(20 wt pct Ti) composites can be attributed to the observed crack deflection/arrest, indicating better damage tolerance. Transmission electron microscope investigation reveals the presence of dense dislocation networks and deformation twins in alpha-Ti at the grain boundaries and triple pockets, surrounded by TiB2 grains. The dynamic strength of around 4 GPa has been measured using Split Hopkinson Pressure Bar tests in a reproducible manner at strain rates of the order of 600 s(-1). The damage progression under high strain rate has been investigated by acquiring real time images for the entire test duration using ultra-high speed imaging. An attempt has been made to establish microstructure-property correlation and a simple analysis based on Mohr-Coulomb theory is used to rationalize the measured strength properties.

Using heat treatment effects and EBSD analysis to tailor microstructure of hybrid Mg nanocomposite for enhanced overall mechanical response

In this study, a detailed investigation on the effect of heat treatment on the microstructural characteristics, texture evolution and mechanical properties of Mg-(5.6Ti+2.5B(4)C)(BM) hybrid nanocomposite is presented. Optimised heat treatment parameters, namely, heat treatment temperature and heat treatment time, were first identified through grain size and microhardness measurements. Initially, heat treatment of composites was conducted at temperature range between 100 and 300 degrees C for 1 h. Based on optical microscopic analysis and microhardness measurements, it was evident that significant grain growth and reduction in microhardness occurred for temperatures > 200 degrees C. The cutoff temperature that caused significant grain growth/matrix softening was thus identified. Second, at constant temperature (200 degrees C), the effect of variation of heat treatment time was carried out (ranging between 1 and 5 h) so as to identify the range wherein increase in average grain size and reduction in microhardness occurred. Furthering the study, the effect of optimised heat treatment parameters (200 degrees C, 5 h) on the microstructural texture evolution and hence, on the tensile and compressive properties of the Mg-(5.6Ti+2.5B(4)C)(BM) hybrid nanocomposite was carried out. From electron backscattered diffraction (EBSD) analysis, it was identified that the optimised heat treatment resulted in recrystallisation and residual stress relaxation, as evident from the presence of similar to 87% strain free grains, when compared to that observed in the non-heat treated/as extruded condition (i.e. 2.2 times greater than in the as extruded condition). For the heat treated composite, under both tensile and compressive loads, a significant improvement in fracture strain values (similar to 60% increase) was observed when compared to that of the non-heat treated counterpart, with similar to 20% reduction in yield strength. Based on structure-property correlation, the change in mechanical characteristics is identified to be due to: (1) the presence of less stressed matrix/reinforcement interface due to the relief of residual stresses and (2) texture weakening due to matrix recrystallisation effects, both arising due to heat treatment.

Interrelationship between Interphase Boundaries and Phase Contents near the Critical Compositions of Lead-Free Ferroelectric (Na0.5Bi0.5)TiO3-BaTiO3

Heterophase structures in lead-free perovskite-type ferroelectric solid solutions of (1 - z)(Na0.5Bi0.5)TiO3 - zBaTiO(3) are analysed for a few critical compositions near the morphotropic phase boundary (z = 0.05-0.07). Examples of the phase coexistence and elastic matching of the phases from different symmetry groups are considered to find optimum volume fractions of specific domain types and coexisting phases at the complete stress relief in two-phase samples. Some interrelations between these volume fractions are described using variants of the domain arrangement at changes in the composition and unit-cell parameters. The evaluated room-temperature volume fractions of the ferroelectric monoclinic (Cm symmetry) and tetragonal (P4mm symmetry) phases near the morphotropic phase boundary are in agreement with experimental data.