Restructuring of the public external debt, following the approval of an arrangement under the Poverty Reduction and Growth Facility by the International Monetary Fund on 21 September 2009
Categories of debt treated:
Treatment of arrears as of June 30, 2009.
Treatment of maturities falling due from July 01, 2009 up to June 30, 2013
repayment of non ODA credits over 23 years, with 6 years of grace
repayment of ODA credits over 40 years with 16 years of grace
On an exceptional basis, considering the Union of the Comoros' limited capacity of payment, further constrained by a harsh global economic context, creditors agreed to defer senior debt (not usually treated by the Paris Club), so that the overall payments expected from the Union of the Comoros between 1 July 2009 and 30 June 2012 will be reduced by around 80%.
Creditors agreed on a further reduction of 50% of the debt service of the Union of the Comoros should the country reach its decision point under the HIPC initiative.
Specific provisions:
Possibility to conduct debt swaps
On a voluntary and bilateral basis, the Government of each Participating Creditor Country or its appropriate institutions may sell or exchange, in the framework of debt for nature, debt for aid, debt for equity swaps or other local currency debt swaps:
(i) the amounts of outstanding loans as regards ODA loans;
(ii) the amounts of other outstanding credits, loans and consolidations, up to 20% of the amounts of outstanding credits as of 30 June 2009 or up to an amount of 30 million SDR, whichever is higher.
Good will clause
Participating Creditor Countries agree to grant a topping-up of the debt reduction of the Agreed Minutes dated 19 November 2009 to Cologne terms once the Government of the Union of the Comoros reaches its Decision Point under the Enhanced Debt Initiative for the Heavily Indebted Poor Countries, provided that the Government of the Union of the Comoros maintains satisfactory relations with the Participating Creditor Countries and the IMF.
Phases
First phase : From July 01, 2009 up to June 30, 2010, implemented at the signature of the agreement
Second phase : From July 01, 2010 up to June 30, 2011, implemented on March 21, 2011
Third phase : From July 01, 2011 up to June 30, 2013, implemented on July 04, 2012
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 Union of the Comoros commits to seek from all its external creditors debt reduction and reorganisation arrangements on terms comparable in net present value to those set forth in the Agreed Minutes dated 19 November 2009 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 Union of the Comoros commits to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 19 November 2009, commercial banks and suppliers- a treatment not more favorable than that accorded to the Participating Creditor Countries.
For the purpose of the comparison between the arrangements concluded by the Government of the Union of the Comoros with its creditors not listed in the Agreed Minutes dated 19 November 2009 on the one hand, and arrangements with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the exposure of the creditors not listed in the Agreed Minutes dated 19 November 2009, the level of cash payments received by those creditors from the Government of the Union of the Comoros as compared to their share in the Union of the Comoros' external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganised claims and in particular their repayment terms whatever forms they take, and in general the financial relations between the Government of the Union of the Comoros and the creditors not listed in the Agreed Minutes dated 19 November 2009.
Cut-off date:
June 20, 1999
Organisation of the session:
The meeting was chaired by Ms Delphine d'AMARZIT, Co Chairperson of the Paris Club
The head of the debtor country's delegation was Dr Ikililou DHOININE, Vice President in charge of the Ministry of Finance
Debt cancellation following the Union of the Comoros having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) on 20 December 2012
Categories of debt treated:
Treatment of arrears as of November 30, 2012. Treatment of the stock as of December 01, 2012
Repayment profile:
Treatment under HIPC Initiative Exit terms
As a contribution to restoring the Union of the Comoros’ debt sustainability, Paris Club creditors will provide a cancellation of USD 8.06 million, fulfilling all their commitments under the enhanced HIPC initiative. In total, the effort provided by Paris Club creditors represents a reduction in net present value of 85.5% of the debt stock of the Union of the Comoros at the beginning of the enhanced HIPC process.
Specific provisions:
Possibility to conduct debt swaps
On a voluntary and bilateral basis, the Government of each Participating Creditor Country or its appropriate institutions may sell or exchange, in the framework of debt for nature, debt for aid, debt for equity swaps or other local currency debt swaps:
(i) the amounts of outstanding loans as regards ODA loans;
(ii) the amounts of other outstanding credits, loans and consolidations, up to 20% of the amounts of outstanding credits as of 30 June 2009 or up to an amount of 30 million SDR, whichever is higher.
Comparability of treatment provision:
The Union of the Comoros was declared eligible to the enhanced HIPC Initiative by the IDA and the IMF in September 2009 and was declared to have reached its Completion Point in December 2012. In this context, the Union of the Comoros commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 28 February 2013, 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 of the Union of the Comoros 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 Union of the Comoros'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 Union of the Comoros and all their other creditors.
Consequently, the Union of the Comoros commits not to accord any category of external creditors -and in particular litigating creditors, creditor countries not participating in the Agreed Minutes dated 28 February 2013, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.
Cut-off date:
June 20, 1999
Organisation of the session:
The meeting was chaired by Mr. Arnaud Buissé, Vice Chairman of the Paris Club.
The head of the debtor country's delegation was Mr. Mohamed Ali Soilihi, Vice-President in charge of the Ministry for Finance, Economy, Budget, Investment and Foreign Trade, and Privatisations.
