Substantial reduction of the stock of debt of the Democratic Republic of Sao Tome and Principe, this country having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) in March 2007
Categories of debt treated:
Treatment of arrears as of February 28, 2007
Treatment of the stock as of March 01, 2007
Repayment profile:
Treatment under HIPC Initiative Exit terms
Comparability of treatment provision:
The Democratic Republic of Sao Tome and Principe was declared eligible to the Enhanced HIPC initiative by the IDA and the IMF in 2000 and was declared to have reached its Completion Point in March 2007. In this context, the Democratic Republic of Sao Tome and Principe commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 24 May 2007, their appropriate contribution in terms of debt relief to the Enhanced HIPC initiative, on top of traditional debt relief mechanisms and consistent with the proportional burden sharing based on their relative exposure in net present value of total external debt at Decision Point after the full use of traditional debt relief mechanisms.
The appropriate nature of the debt relief provided will be assessed not only on the basis of the reduction in the net present value of the debt as computed under Appropriate Market Rate, but also on the terms of repayment of the debts not cancelled. For this purpose, all relevant elements will be taken into account, including the level of cash payments received by those creditors as compared to their share in the Democratic Republic of Sao Tome and Principe's external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganized claims and in particular their repayment terms whatever forms they take and in general the financial relations between the Democratic Republic of Sao Tome and Principe and creditor countries not listed in the Agreed Minutes dated 24 May 2007.
Consequently, the Democratic Republic of Sao Tome and Principe commits not to accord any category of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 24 May 2007, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.
Cut-off date:
April 01, 1999
Organisation of the session:
The meeting was chaired by Mr. Ambroise Fayolle, Co Chairman of the Paris Club
The head of the debtor country's delegation was Mrs Maria dos Santos Tebus Torres, Vice Prime Minister and Minister of Planning and Finance
Repayment of ODA credits over 40 years with 16 years of grace
Specific provisions:
Good will clause
Given the decision by Paris Club Creditors to contribute to the exceptional assistance in favour of the Government of Sao Tome and Principe under the Enhanced HIPC Initiative, the Participating Creditor Countries declare their readiness in principle to hold a meeting at the Completion Point designed to examine the question of the outstanding debt stock and to make the necessary effort in its favour to reach the objective of its debt sustainability in the context of an equitable burden sharing among creditors, provided that:
- the Government of Sao Tome and Principe maintains satisfactory relations with the Participating Creditor Countries and a sound adjustment track record;
- Sao Tome and Principe reaches its Completion Point under the enhanced HIPC initiative.
Phases
First phase : From May 01, 2001 up to December 31, 2005, implemented at the signature of the agreement
Second phase : From January 01, 2006 up to December 31, 2006, implemented on September 29, 2006
Third phase : From January 01, 2007 up to December 31, 2007, implemented on May 24, 2007
Comparability of treatment provision:
In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of Sao Tome and Principe commits to seek from all its external creditors debt reduction and reorganization arrangements on terms comparable in net present value to those set forth in the Terms of Reference dated September 13, 2005 for credits of comparable maturity. Comparability of treatment for debt reduction in net present value is assessed not only on the basis of the reduction in the face value of the debt but also on the terms of repayment of the debts not cancelled. Consequently, the Government of Sao Tome and Principe commits to accord all categories of creditors -and in particular creditor countries not participating in the Terms of Reference, commercial banks and suppliers- a treatment not more favourable than that accorded to the Participating Creditor Countries.
For the purpose of the comparison between the arrangements concluded by the Government of Sao Tome and Principe with the non participating countries and those concluded with the Participating Creditor Countries, all relevant elements shall be taken into account, including the exposure of the creditors not listed in these Terms of Reference, the level of cash payments received by those creditors from the Government of Sao Tome as compared to their share in Sao Tome's external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganized claims and in particular their repayment terms whatever forms they take and, in general, the financial relations between the Government of Sao Tome and Principe and the creditors not listed in the Terms of Reference.
Cut-off date:
April 01, 1999
Organisation of the session:
The meeting was chaired by M. Ambroise Fayolle, Co-President of the Paris Club.
The head of the debtor country's delegation was Mme Joana Damiana da Graça Varela, Director of Treasury and Government Assets.
Treatment of maturities falling due from April 01, 2000 up to April 30, 2003
Repayment profile:
Treatment under Naples terms (cancellation rate of 67%)
Specific provisions:
Good will clause
In response to the request of the representatives of the Government of the Democratic Republic of Sao Tome and Principe, the Participating Creditor Countries agreed in principle to a meeting to consider the matter of the Democratic Republic of Sao Tome and Principe's debt service payments falling due after April 30, 2003 and relating to loans or credits pursuant to a contract or other financial arrangement concluded before April 1st, 1999, provided:
- that the Democratic Republic of Sao Tome and Principe continues to have an appropriate arrangement with the International Monetary Fund;
- that the Democratic Republic of Sao Tome and Principe has reached with other creditors effective arrangements meeting the conditions described in [the Agreed Minute dated May 16, 2005] and has reported in writing to the Chairman of the Paris Club, pursuant to [the Agreed Minute ] ;
- and that the Democratic Republic of Sao Tome and Principe has complied with all conditions set out in this Agreed Minute.
Phases
First phase : From April 01, 2000 up to April 30, 2001, implemented at the signature of the agreement
Second phase : From May 01, 2001 up to April 30, 2002, not implemented
Third phase : From May 01, 2002 up to April 30, 2003, not implemented
De minimis threshold of 150 000 SDR
Payment of non-consolidated amounts before October 31, 2000
Comparability of treatment provision:
In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of the Democratic Republic of Sao Tome and Principe commits itself to seek promptly from all its external creditors debt reduction and reorganization arrangements on terms comparable in net present value to those set forth in the Agreed Minute dated May 16, 2000 for credits of comparable maturity. Comparability of treatment for debt reduction in net present value is assessed not only on the basis of the reduction in the face value of the debt but also on the terms of repayment of the debts not cancelled.
Consequently, the Government of the Democratic Republic of Sao Tome and Principe commits itself to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minute, commercial banks and suppliers- a treatment not more favourable than that accorded to the Participating Creditor Countries.
For the purpose of the comparison between the arrangements concluded by the Government of the Democratic Republic of Sao Tome and Principe with its creditor not listed in the present Agreed Minute on the one hand, and with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the real exposure of the creditors not listed in the Agreed Minute, the level of cash payments received by those creditors from the Government of the Democratic Republic of Sao Tome and Principe as compared to their share in the Democratic Republic of Sao Tome and Principe's external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganized claims and in particular their repayment terms whatever forms they take and in general the financial relations between the Government of the Democratic Republic of Sao Tome and Principe and the creditors not listed in the Agreed Minute.
The Government of the Democratic Republic of Sao Tome and Principe will inform in writing the Chairman of the Paris Club no later than December 31, 2000 of the progress made for this purpose in negotiations with other creditors [of the Agreed Minute], and will communicate to the Chairman of the Paris Club the content of its bilateral agreements with these creditors.
