Back Matter

Back Matter

G. Kincaid, K. Dillon, Maxwell Watson, and Chanpen Puckahtikom
Published Date:
October 1985
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    APPENDIX I Country Groupings

    Country classifications used in this paper and reproduced below are those adopted by the Fund in December 1979 and used in International Financial Statistics during March 1980–May 1985, and in the World Economic Outlook, Occasional Paper No. 32, September 1984. Subsequently, the Fund adopted a new country classification which is described in the World Economic Outlook published in April 1985. The new classification has not been used in this paper because most of this paper’s statistical and analytical work was completed before the new system was adopted, and necessary historical data based on the revised classification were not available.15

    Country Classification Used in the Present Study

    Industrial countries








    Germany, Federal Republic of







    New Zealand





    United Kingdom

    United States

    The developing countries are divided into two groups: oil exporting and non-oil countries.

    Oil exporting developing countries



    Iran, Islamic Republic of



    Libyan Arab Jamahiriya




    Saudi Arabia

    United Arab Emirates


    Non-oil developing countries and territories





    Burkina Faso



    Cape Verde

    Central African Republic





    Equatorial Guinea



    Gambia, The




    Ivory Coast










    Mozambique, People’s Republic of




    St. Helena

    Sāo Tomé and




    Sierra Leone


    South Africa












    American Samoa





    China, People’s Republic of


    French Polynesia

    Hong Kong


    Kampuchea, Democratic



    Lao People’s Democratic Republic






    New Caledonia


    Papua New Guinea



    Solomon Islands

    Sri Lanka




    Viet Nam

    Western Samoa



    Faeroe Islands









    Middle East






    Syrian Arab Republic

    Yemen Arab Republic

    Yemen, People’s Democratic Republic of

    Western Hemisphere

    Antigua and Barbuda








    Cayman Islands



    Costa Rica


    Dominican Republic


    El Salvador

    Falkland Islands





    Guiana, French








    Netherlands Antilles





    St. Christopher and Nevis

    St. Lucia

    St. Pierre and Miquelon

    St. Vincent


    Trinidad and Tobago


    U.S. Virgin Islands

    Apart from these classifications, the following groupings have been used in some of the tables in this paper.

    Offshore centers in non-oil developing countries and territories



    Cayman Islands

    Hong Kong

    Netherlands Antilles



    Centrally planned economies




    German Democratic Republic


    Union of Soviet Socialist Republics

    APPENDIX II Glossary of Selected Terms

    Multilateral Bank Debt Restructuring

    Bank advisory committees—also called coordinating committees, a limited number of banks designated by the authorities of a country to act on behalf of and as a liaison group with all bank creditors. Once an agreement is reached with the advisory committee it is then submitted for approval to all participating banks. Typically, membership of advisory committees is determined on the basis of banks’ exposure and to secure a regional balance. The bank with the largest exposure usually heads the committee, while member banks often act as regional coordinators.

    Cofinancing—loans to developing countries made by commercial banks or other lending institutions in association with the World Bank and other multilateral development banks.

    Concerted bank lending—refers to equiproportional increases in exposure to a restructuring country, coordinated by a bank advisory committee. There has generally been a close linkage between disbursements of concerted bank lending to a country and performance under a Fund-supported adjustment program.

    Consolidation period—the period in which amortization payments to be rescheduled or refinanced under the terms of a restructuring agreement have fallen or will fall due.

    Critical mass—a minimum amount of bank commitments to a new money package giving reasonable assurance to Fund management that the financing assumptions of an adjustment program are realistic and that the program can be submitted to the Fund Executive Board for approval.

    Debt refinancing—either a rollover of maturing debt obligations or the conversion of existing or future debt-service payments into a new medium-term loan.

    Debt rescheduling—formal deferment of debt-service payments with new maturities applying to the deferred amounts.

    Debt restructurings—rescheduling or refinancing of debt-service payments in arrears and/or of future debt-service payments, undertaken in response to external payments difficulties.

    Economic subcommittee—subcommittee of a bank advisory committee appointed to evaluate economic prospects of a restructuring country.

    Events of default—any event which allows creditor banks to declare the outstanding principal, as well as all accrued interest, due and payable on demand.

    Floating rate notes—unsecured notes paying interest at rates varying with the yield on a reference interest rate such as LIBOR.

    LIBOR—London Interbank Offered Rate. The rate at which banks in London place Eurocurrencies with each other. It is frequently used in international loans as a reference rate.

    Moratorium—an official declaration or decree by a government postponing all or certain types of maturing debt for a given period.

    Multiyear restructuring agreement (MYRA)—Restructuring agreement where the consolidation period covers more than two years beyond the date of the signing of the agreement. These arrangements aim principally at eliminating a hump in scheduled amortization which may prevent a return to normal market access. In the context of MYRAs, banks have sought special monitoring procedures to seek to ensure that adequate financial policies would be followed once the restructuring country no longer is using Fund resources. As part of these special monitoring procedures some restructuring countries have requested that the Fund enhance its Article IV consultations.

    Trade deposit facility—facility under which participating creditor banks make foreign exchange deposits at the central bank of the restructuring country. These deposits then may be withdrawn by these banks to finance specified foreign trade transactions.

    Onlending—redesignation of credits originally granted to a government or central bank for general balance of payment purposes as loans to parastatals or private sector borrowers.

    Redenomination clause—a clause which, in the context of a debt restructuring agreement, allows banks to redenominate their loans in their home currency. The agreement normally specifies the amount, timing, and currency eligibility of such redenomination as well as the applicable reference interest rates.

    Standstill—an agreement between bank creditors and a government on a temporary deferment of amortization payments on long-term debt and on a freezing or rollover of short-term debt. Its principal objectives are to prevent a deterioration of the payments situation during the restructuring negotiation period and to preclude an uneven reduction in debt to some banks.

    Multilateral Official Debt Restructuring

    Agreed Minute—the terms agreed upon in a multilateral rescheduling meeting are embodied in an Agreed Minute of the meeting. The Minute provides guidelines for the debt relief that subsequently is arranged on a bilateral basis between the debtor and each creditor country. The Minute normally specifies the coverage of debt consolidated, the cutoff date, the consolidation period, the proportion of payments to be rescheduled, the provisions regarding the downpayment, and the repayment schedule for both the rescheduled and any deferred debt.

    Arrears—unpaid amounts that fell due before the beginning of the consolidation period.

    Bilateral agreements—agreements reached bilaterally between the debtor country and agencies in each of the participating creditor countries establishing the legal basis of the debt rescheduling as set forth in the Agreed Minute. Information on the terms of bilateral agreements is regarded as confidential. Bilateral agreements normally specify financial terms such as the interest rate on amounts rescheduled (moratorium interest), which is agreed bilaterally between the debtor and each creditor. Although the Agreed Minute now always refers to the interest rate being set on the basis of the market interest rate, in the past some Minutes had stipulated that each creditor country should make the maximum effort to keep the rate of interest as low as market conditions and legal considerations permit. The latter stipulation has not been made in more recent agreements as creditors have indicated their desire that the question of the interest rate be determined solely on a bilateral basis.

    Bilateral deadline—the date by which the bilateral agreements must be concluded. The period for concluding bilateral agreements is now generally eight to nine months from the date of the Agreed Minute.

    Conditional further rescheduling—refers to the provision in some Agreed Minutes setting forth the terms of rescheduling for payments that fall due in a specified subsequent future period and the conditions for such a rescheduling to become effective without a further Paris Club meeting.

    Consolidation period—the period in which debt-service payments to be consolidated or rescheduled under the terms applicable to current maturities have fallen or will fall due. The beginning of the consolidation period may precede or coincide with the date of the Agreed Minute.

    Current maturities—principal and interest payments falling due within the consolidation period.

    Cutoff date—the date before which loans must have been contracted in order for their debt service to be eligible for consolidation.

    “De minimis” clause—the provision whereby creditor countries whose claims eligible for rescheduling total to less than a specified amount are excluded from the rescheduling agreement. In the past, the de minimis amount was set at around SDR 1 million, but two thirds of the agreements in 1983 and 1984 provided for limits of SDR 500,000 or SDR 250,000. The debtor is expected to pay all claims excluded from the rescheduling by this clause as soon as possible and in any case by a specified date.

    Down payment—in this paper, down payment refers to payments falling due within the consolidation period.

    Effective rescheduling proportion—the proportion of total payments eligible for consolidation that are rescheduled or otherwise deferred until after the end of the consolidation period.

    Goodwill clause—refers to the creditors’ willingness as expressed in the Agreed Minute to consider further debt relief in the future, subject to fulfillment by the debtor country of certain specified conditions.

    Grace and maturity periods—in this paper, these periods are measured from the end of the consolidation period. The more recent practice of the Paris Club is to measure grace periods and maturities from a date six months after the midpoint of the consolidation period.

    Initiative clause—the standard undertaking in the Agreed Minute that the debtor country will seek renegotiation of debts owed to other creditors on terms comparable to those outlined in the Agreed Minute. The clause appears as one of the general recommendations and reads:

    • “In order to secure comparable treatment of public and private external creditors on their debts, the Delegation of [debtor country] stated that their Government will seek to secure from external creditors, including banks and suppliers, rescheduling or refinancing arrangements on terms comparable to those set forth in this Agreed Minute for credits of comparable maturity, making sure to avoid inequity between different categories of creditors.”

    Late interest charges—additional interest charges that may be levied as a result of obligations being overdue beyond a specified period. In some recent agreements, late interest charges have been listed specifically among debt service to be excluded from consolidation.

    Maturity period—the grace period plus the repayment period.

    Moratorium interest—interest on amounts deferred or rescheduled under the Agreed Minute.

    Most-favored-nation clause—the standard undertaking in the Agreed Minute that the debtor country will accord to each of the participating creditor countries a treatment not less favorable than that which it may accord to any other creditor country for the consolidation of debts of a comparable term.

    Previously rescheduled debt—debt service obligations arising from previous debt reschedulings.

    Special account—an account established under some Agreed Minutes by the debtor country with the central bank of one of the participating creditor countries into which monthly deposits in an agreed amount are made. The total amount to be deposited usually approximates the amounts estimated to be payable to all participating creditors during the year; the debtor country would draw on the account as bilateral implementing agreements were signed and specific payments under these agreements became due.

    APPENDIX III Nonguaranteed Suppliers

    In general, two major creditor groups—commercial banks and official creditors—account for a preponderant share of a country’s debt service obligations that can be regarded as potentially eligible for rescheduling. Aside from these two creditor groups, a debtor country usually also has obligations to nonbank creditors abroad that are not covered by creditor country guarantees. These types of obligations do not come under the umbrella of any established multilateral debt rescheduling forum, and since they are mostly owed to nonfinancial companies and suppliers, they have been termed nonguaranteed suppliers’ credits.

    This appendix provides supplementary material on recent experiences in dealing with nonguaranteed suppliers’ credits in cases where the debtor countries have obtained multilateral reschedulings of debt owed to other creditors. A broad description of the alternative approaches adopted by debtor countries is followed by a more detailed review of the experiences of Turkey (1980), Romania (1982), Mexico (1983), and Nigeria (1984).

    Alternative Approaches

    In the past, the question of whether it would be feasible or desirable for countries to restructure their debt service on nonguaranteed suppliers’ credits rarely arose. Recently, however, as countries’ overall debt-servicing difficulties have become more acute, the issue has become more relevant in the context of limited external financial resources and overall debt restructurings. On the basis of available information, some broad trends are discernible.16

    About one third of the countries with recourse to bank and official multilateral debt reschedulings have found it practical for several reasons to remain current on obligations to nonguaranteed suppliers. Normally, the amounts involved are small, both in relation to amounts owed to the other main creditor groups and in relation to overall financing needs, and the administrative costs of setting up a framework to restructure such debt service could be so high as to outweigh the potential savings in foreign exchange. Also, it is generally considered difficult and time consuming to obtain an agreement that would be equally acceptable to a large number of small suppliers with diverse interests and relationships with domestic borrowers. Finally, and perhaps most significantly, importers tend to be willing to keep current on their obligations in order to preserve trade relationships and credit flows with traditional suppliers, since failure to remain current could lead to a reduction in trade credit or a substantial rise in import costs through higher markups, or even to a cutoff in the supply of essential goods.

    Given the incentives for individual domestic borrowers to remain current on suppliers’ credits, it is not surprising that when alternatives to cash settlements have been officially adopted, domestic borrowers have often been provided with options to settle obligations to suppliers outside those arrangements. For example, in 1983 Mexican borrowers could have settled such obligations through a variety of options, including obtaining the needed foreign exchange through the free market as an alternative to the official scheme (see below). Moreover, even under a strict official rationing of foreign exchange, certain suppliers in privileged positions can continue to secure payments on schedule if domestic borrowers use the parallel exchange market. In some instances, the suppliers may succeed in settling the amounts owed by retaining export receipts of the borrowers held abroad.

    When external payments arrears have accumulated, the debtor country may find it necessary to formalize the mechanism for an orderly settlement of arrears in order to restore the confidence of creditors. One approach has been to settle nonguaranteed suppliers’ credits as a part of an arrears reduction plan. When the debtor country has a stand-by arrangement with the Fund, it is a standard practice to agree on a schedule for reducing arrears (including arrears on debt service to nonguaranteed suppliers), with the target amounts for, and the phasing of such a reduction specified as performance criteria. Frequently, the plan is calculated on the basis of a projected foreign exchange budget, and priorities may vary among countries. This approach seems suited for countries with relatively small and manageable amounts of arrears; for others with large arrears, it is likely to be only a transitional measure.

    For debtor countries faced with serious or prolonged debt-servicing difficulties and consequent erosion of creditors’ confidence, a systematic restructuring may eventually be needed instead of the more ad hoc approach described above. The choice of the frame-work for restructuring nonguaranteed suppliers’ credits, whether a series of bilateral negotiations or a broad-based multilateral discussion, depends on the amount involved, the composition and the number of creditors, and the degree of convergence among their interests. Some countries begin with attempts to negotiate bilaterally with their major suppliers, often with the aim of linking the terms to those obtained under bank or Paris Club restructurings.

    Bilateral negotiations with key suppliers could prove most expedient if there are very few suppliers and they are similarly positioned in their relationships with the debtor country, and if the amounts involved are sufficiently large, such as major suppliers of petroleum and heavy capital equipment. In these instances, trade ties are normally quite well established, and prompt conclusion of agreements is in the mutual interest of both the importers and the creditors. Bilateral negotiations of this type are often not recorded, and thus information on the agreed terms and conditions is generally not publicly available.

    As a next step, a broad-based multilateral rescheduling of nonguaranteed suppliers’ credits might be considered if arrears on these are very large, either in absolute terms or relative to arrears owed to other creditors. To date, there has been one publicized case of multilateral rescheduling of these obligations (see the section on Nigeria, 1984 below); a similar but less systematic attempt was also made by Romania (1982, see below). In the case of Nigeria, for the first time the creditors formed a steering committee to renegotiate collectively; this experience is being considered by a few other countries, such as Ivory Coast. The other reschedulings of suppliers’ credits have been undertaken unilaterally by the debtor countries and have been applied mainly to arrears (Costa Rica, Guatemala, Venezuela, and Turkey, 1980; and Mexico, 1983 below); the terms have varied from favorable for the nonguaranteed suppliers to stringent.

    Although the details of specific arrangements vary, those unilateral approaches that have proved most workable have common features. First, the credits in question are usually already in arrears with unspecified or unknown original maturities, and the instruments for their rescheduled payment are usually issued by the central monetary authorities and are thus guaranteed by the debtor government. The instruments are either discountable or marketable, if not in the official market, then in a secondary market that is at least officially sanctioned. Second, the schemes are voluntary; domestic borrowers as well as foreign creditors are normally given the option to follow certain alternatives. Third, additional flexibility is usually provided in the form of options on terms or timing, for instance, through currency options and other provisions that allow for differences in exchange rate expectations. Creditors can therefore choose the combination suited to their interests and risk preferences. These features, especially those relating to flexibility, are thought to have helped ensure success for the plan adopted by Turkey (1980).

    Concerning comparability of terms with other creditor groups, generalizations cannot be made since the available information is confined to a few cases and refers only to the terms and conditions that were officially offered. For example, in the case of Turkey, the terms received by nonguaranteed suppliers appear to have been less favorable than those agreed with the Paris Club or with banks; comparable official claims, for instance, were rescheduled over seven years compared with ten years for nonguaranteed suppliers’ claims. If account is also taken of likely discounts of the instruments in the secondary market, the terms eventually received by these suppliers were probably even less favorable than those officially offered. In the case of Mexico, the relatively rapid liquidation of unrescheduled arrears made it possible for the suppliers to receive terms that seem considerably more favorable than those agreed with official creditors—the maturity period was much shorter (under two years) and a much higher percentage was set as a down payment (50 percent within the first year of repayment).

    Country Experiences

    Turkey (1980)

    The resolution of Turkey’s debt crisis that emerged in the late 1970s involved comprehensive restructuring arrangements with official creditors, commercial banks, and nonguaranteed private suppliers.17 After two successive multilateral debt renegotiations (conducted through an OECD consortium) in 1978–79, it became clear that a very large part of arrears outstanding at the beginning of 1980 was in fact owed to nonguaranteed suppliers (estimated at $1.4 billion, or some 70 percent of total trade arrears). A systematic restruc-turing of such nonguaranteed arrears was recognized as necessary in order to restore confidence and orderly trade finance. Accordingly, in January 1980, the Turkish authorities initiated a program of phased elimination of these arrears. After a slow start, the program was subsequently modified to enhance its acceptance by creditors.

    The modified program had four main features. First, it contained currency options—creditors could reschedule their claims in terms of either Turkish lira or five other foreign currencies (U.S. dollars, deutsche marks, pounds sterling, French francs, and Swiss francs); claims in currencies other than the specified currencies were to be converted to one of the latter at the cross rates applied by the Central Bank of Turkey on January 25, 1980. Second, the program allowed for differentiated repayment terms by currency options—local currency obtained under the Turkish lira option could be used for extending credit to importers in Turkey, for payment of taxes, and for investment and equity participation in specified sectors; such investments could not be transferred abroad for at least five years. Under the Turkish lira option, conversion of claims for investment and for export production of up to $1 million would take place at a discount of 15 percent from the exchange rate prevailing at the time of settlement and for such claims exceeding $1 million at a discount of 10 percent.18 All other claims would be settled at a 33.3 percent discount on the exchange rate prevailing on January 25, 1980, the initial proclamation date of the program. Payments for claims of less than $10,000 would take place immediately; claims exceeding $10,000 were to be settled in two years in 12 equal bimonthly payments. Under the foreign currency option, 60 percent of each claim was to be settled in eight semiannual installments over four years, after a grace period of four years; the remaining 40 percent was to be repaid subsequently in four equal semiannual installments. The third feature was that the rates of interest applicable to the rescheduled foreign currency option claims were currency specific, 6 percent for claims in U.S. dollars, for instance, and 4 percent for deutsche marks. Finally, creditors had to inform the authorities of their choice of option within 90 days of the publication of the decree. Claimants choosing the foreign currency option were authorized to switch to the Turkish lira option, initially up to the end of 1981 and then up to June 30, 1982.

    The response of creditors to the program was regarded as very favorable, in large part owing to the flexible elements of the program, in particular, the currency options and the repayment terms and interest rates that were currency specific. Furthermore, as the program advanced, data verification procedures in the Central Bank became more systematic and the program was increasingly better managed. Also, a secondary market had begun to develop where creditors could buy claims at a discount and, exercising the Turkish lira option, use the proceeds for local expenditure. As a result, an estimated 80 percent of eligible arrears were regularized within one year, with creditors exercising equally the foreign currency and the Turkish lira options, and by June 1982 all suppliers’ arrears had been eliminated.

    Romania (1982)

    Romania’s payments difficulties emerged in mid-1981, and in 1982 first the banks, then the Paris Club, rescheduled Romania’s obligations. The issue of comparable treatment vis-à-vis nonguaranteed suppliers arose in the restructuring discussions with banks, in which Romania undertook to obtain reschedulings on similar terms from foreign suppliers as well as Western official creditors, the International Bank for Economic Cooperation, the International Investment Bank, and some Middle Eastern central banks. The “Suppliers’ Arrears Programme” was specifically included in the bank restructuring agreement as one of the triggers which could require a prepayment of rescheduled bank debt. This program sought to ensure comparability of repayment terms by specifying, over the period in which amounts rescheduled by banks were to be repaid, a minimum path below which the stock of arrears owed to nonguaranteed suppliers was not permitted to fall.

    Romania’s experience in attempting to reschedule nonguaranteed suppliers’ credits illustrates the type and range of problems involved in discussions that are not centralized and where creditors are not represented in a collective manner. First, there were practical and logistical difficulties created by the fact that over 2,000 suppliers with outstanding claims were potentially party to the negotiations. It was decided that the negotiating discussions should be confined to some 550 larger suppliers with claims greater than $50,000; this smaller group still proved unmanageable and it was time-consuming to verify the individual claims. As for the smaller suppliers with claims below $50,000, with the concurrence of the banks, it was agreed that a special account could be used to settle these obligations. Second, apart from these problems of logistics, there were fundamental difficulties that were not readily resolvable: individual creditors had widely diverse interests and strengths, and incentives existed for certain creditors in a dominant or privileged position to be accorded preferential treatment. With a wide divergence in negotiating strengths, suppliers made individual proposals containing varying terms and conditions which were difficult to reconcile.

    By the end of an eight-month period, it proved difficult to ascertain the extent to which the final agreement was strictly consistent with the terms and conditions initially set under the “Arrears Programme.” Available information indicates that out of the initial estimated $1.3 billion reschedulable amount, only some $500 million may eventually have been rescheduled in this manner. This very substantial erosion in coverage was attributable to a number of factors, including cash payments to small suppliers, cash payments to the largest suppliers, and direct retention by some suppliers of export proceeds of Romania held abroad. Discussions to arrive at a mutually acceptable solution proved particularly difficult with a group of large suppliers to whom a relatively substantial amount was owed, and the authorities did not succeed in securing arrangements on terms (such as repayment periods) comparable to those with banks. Overall, arrangements were concluded with most suppliers by 1983, and the Romanian authorities were able to make down payments which in the aggregate were equivalent to no more than 20 percent of unpaid suppliers’ credits, hence broadly consistent with the provision of the banks’ agreement.

    Mexico (1983)

    The major part of Mexico’s debt restructuring efforts since the liquidity crisis in August 1982 has been directed toward the commercial banks—the predominant group of creditors. As regards official creditors, in June 1983 an agreement was reached to reschedule debt of the Mexican private sector, in arrears on June 30, 1983 or falling due through December 31, 1983, that was owed to or guaranteed by official creditors. In the case of the nonguaranteed suppliers, debt owed by the Mexican private sector was rescheduled in 1983 under the Foreign Exchange Risk Coverage Trust Fund (FICORCA). This fund was established in 1983, first to assist the private sector to settle payments arrears to foreign suppliers, and second to provide a framework for the refinancing and forward exchange coverage of the private sector’s external debt.

    In February 1983 the Bank of Mexico established a facility to permit the settlement of arrears of the Mexican private sector to foreign suppliers outstanding as of December 20, 1982 and of payments due before June 30, 1983; a similar facility was again established in August 1983 to settle obligations due between July 1 and December 19, 1983. By depositing with FICORCA the peso equivalent of payments due, private debtors were guaranteed the peso-U.S. dollar rate in the controlled market on the deposit date. If the foreign creditor agreed to be paid by the transfer of these deposits to his name, FICORCA agreed to make the foreign exchange available to the foreign creditor according to a schedule of payments to be announced later. Alternatively, domestic borrowers were allowed to settle arrears through the free market or to enter a queue to obtain foreign exchange from the Bank of Mexico at the controlled exchange rate. In the case of exporters, they were allowed to allocate up to 20 percent of their export receipts to service outstanding obligations abroad, or up to 100 percent of receipts from new exports approved under special export agreements with the Government.

    Repayment schedules under the deposit scheme were announced in August and November 1983 as follows:

    • For the February 1983 scheme, covering obligations due through the end of June 1983, 50 percent of the principal and accrued interest would be paid in September 1983, provided that deposit rights were transferred to foreign creditors no later than August 15, 1983. The balance would be repaid in March 1984 for obligations registered before February 15, 1984, and in March 1985 for any remaining obligations.

    • For the August 1983 scheme, covering obligations due between July 1 and December 19, 1983, payments would be made in full in March 1984, provided that deposit rights were transferred to creditors by January 31, 1984. By early 1984, a total of $500 million in private sector arrears to foreign suppliers had been identified under these two schemes, of which $200 million were settled in 1983 and the balance paid by March 1984.

    Under the official creditor group’s Agreed Minute of June 23, 1983, arrears, including on short-term debt, were to be repaid as follows: 5 percent in 1983, 5 percent in 1984, 30 percent in 1985, and the remaining 60 percent in 1986. For medium-term and long-term obligations falling due between July and December 1983, 10 percent was to be repaid at maturity and the remaining 90 percent in semiannual payments starting in December 1986 and concluding in June 1989.

    A restructuring of the external debt of the Mexican private sector has also been encouraged, in order to ease the pressure on Mexican firms resulting from the depreciation of the peso in 1982. To facilitate such restructuring, a scheme was developed under FICORCA whereby firms with obligations outstanding as of December 20, 1982 and whose debt was refinanced at specified minimum terms were permitted to obtain forward exchange cover in order to spread the exchange losses over the new maturity period of the restructured loan.

    A Mexican debtor had the option of continuing to pay interest and thus seek cover only for principal payments, or of covering fully the servicing of the obligations. Under each of these two options, the debtor also had the alternatives of cash or credit settlements. Under the option of covering principal payments only, a debtor willing to deposit with FICORCA the total peso equivalent of the obligation due abroad would be able to convert these pesos at a more appreciated rate than the one prevailing in the controlled market, with the rate varying according to the maturity of the restructured loan—larger discounts were provided for longer maturities. Under the second option, where the debtor obtained coverage of interest payments due abroad as well, the conversion would be made at the controlled rate prevailing on the date the deposit was constituted.

    To be eligible for this scheme, the rescheduling had to be for at least six years, with a three-year grace period, if the coverage sought was only against principal; the rescheduling had to be for eight years, with a four-year grace period, if both principal and interest payments due abroad were to be covered. The forward cover scheme does not transfer either the obligation or the commercial risk to FICORCA, since the domestic borrower remains responsible for the servicing of the debt to the foreign creditor for the entire life of the rescheduled loan. Prior agreement between borrower and foreign lender is required for the coverage to become effective.

    The deadline for registering private debt restructuring operations under FICORCA was initially programmed to lapse on October 25, 1983 but was extended to November 5, 1983. As of that time, some $11.6 billion had been registered under the various options available. The bulk of these operations—94 percent of the total—included the provision of forward exchange coverage by FICORCA of both principal and interest payments, as well as financing by FICORCA of the peso deposit constituted by the debtor. Only 2 percent of the total entailed the payment in cash of the obligations at the current or discounted rate.

    Nigeria (1984)

    Nigeria’s difficult payments situation was reflected primarily in a sharp accumulation of trade arrears beginning in 1982. By early 1984, it was estimated that outstanding trade arrears (owed by both the public and private sectors) amounted to some $5.8 billion, of which at least $1.7 billion was owed to or guaranteed by official creditors and the remainder to private nonguaranteed suppliers, largely on intercompany open accounts. Accordingly, in early 1984 Nigeria requested its suppliers to assist in resolving the trade arrears problem in order to restore normal trading relationships. The initial proposal made by Nigeria was criticized by the uninsured suppliers primarily on the grounds that the terms were less favorable than those already accorded to the commercial banks for the 1982 and 1983 refinancing of arrears on letters of credit. In response to this initial proposal, in January 1984, a trade creditor group of some 350 suppliers was formed to secure a mutually satisfactory basis for the settlement of arrears; the group was owed more than $2 billion, with claims in arrears on average by 18 months. Members of the trade creditor group were from some 20 countries, and consisted of five different types of companies: major international trading companies with very large Nigerian exposures; major corporations with exposures that were small relative to their balance sheets but large in absolute terms; commodity trading houses with substantial exposures; major international construction companies; and a large number of small exporters whose exposures were large relative to their balance sheet and who in the aggregate represented a significant share of total arrears.

    The trade creditor group established a steering committee that reflected both the geographic pattern of membership and the nature of the companies involved, and an investment banking firm was appointed by the steering committee to act as banking advisor. Agreement was reached relatively promptly in April 1984 on a rescheduling of short-term trade arrears outstanding at the end of 1983 over a six-year period including two-and-a-half years’ grace, in which all creditors (insured in creditor country or uninsured) were to be treated uniformly. In the case of uninsured creditors, the proposed refinancing mechanism was that the Central Bank would issue promissory notes under the guarantee of the Federal Government in settlement of agreed uninsured trade and other debt owed by Nigerian importers. The notes would be once discountable and would carry an interest rate of LIBOR plus 1 percent from January 1, 1984. After completion of time-consuming verification procedures, promissory notes have been issued under the agreement as envisaged.

    As regards trade arrears owed to or with guarantee of official creditors, in 1984 Nigeria also initiated informal discussions with certain export credit agencies and government departments of its major trading partners to discuss the same proposal that was agreed to by the nonguaranteed suppliers. While creditor governments have indicated their willingness to reschedule arrears on a multilaterally negotiated basis, subject to the existence of an upper credit tranche arrangement with the Fund, they also indicated that they could not accept promissory notes implying a rescheduling scheme that has not been multilaterally negotiated. Since the Nigerian proposal attempted to preserve comparable treatment among creditors, and in order to ensure that payments on interest in the interim period are made to the appropriate creditors before the multilateral rescheduling actually takes place, a contact group was set up by official creditors to discuss technicalities and to agree on a mechanism to restore interim payments. It was emphasized that the mechanism and the related payments would in no way imply or prejudge the terms and conditions of any eventual official multilateral, and implementing bilateral, rescheduling agreements, especially as regards the amounts to be rescheduled, the currencies to be used, and the interest rate.

    APPENDIX IV Statistical Tables
    Table 5.International Lending to Developing Countries Through Banks and Bond Markets, 1973–841(In billions of U.S. dollars, unless otherwise indicated)
    Lending to developing countries
    Bond issues2111246324535
    Bank lending3
    Growth in bank claims (in percent)3
    Lending to non-oil developing countries
    Bond issues2111234324435
    Bank lending3
    Growth in bank claims (in percent)3
    Memorandum items:
    Interest rates (six-month Eurodollar deposit rate average; in percent)9.311.
    Oil exporting countries’ current account balance76935392966211052–14–18–6
    Non-oil developing countries’ current account balance–11–37–46–33–30–42–62–88–108–86–52–38
    Reserve accumulation of non-oil developing countries10321311171274–41019
    Sources: Bank for International Settlements (BIS); Organization for Economic Cooperation and Development; International Monetary Fund, International Financial Statistics; World Economic Outlook, April 1985: A Survey by the Staff of the International Monetary Fund (Washington); and Fund staff estimates.
    Table 6.Cross-Border Interbank Lending and Deposit Taking, 1982–841(Changes, in billions of U.S. dollars)
    Lending to2105102149
    Industrial countries7377106
    Of which: United States463924
    Developing countries161610
    Oil exporting77
    Offshore centers18628
    Other transactors–235
    Deposit taking from312597152
    Industrial countries11362119
    Of which: United States811677
    Developing countries–9621
    Oil exporting7744
    Offshore centers172111
    Other transactors382
    Change in net claims on4
    Industrial countries–4015–13
    Of which: United States–35237
    Developing countries2510–10
    Oil exporting724–3
    Offshore centers1–1617
    Other transactors–5–43
    Net errors and omissions520–53
    Sources: International Monetary Fund Statistics (IFS); and Fund staff estimates.
    Table 7.International Bank Lending to Nonbanks and Deposit Taking from Nonbanks, 1982–841(Changes, in billions of U.S. dollars)
    Lending to2803739
    Industrial countries51159
    Of which: United States14172
    Developing countries35225
    Oil exporting972
    Offshore centers722
    Other transactors121
    Unidentified borrowers12–421
    Deposit taking from3636439
    Industrial countries37612
    Of which: United States26166
    Developing countries13234
    Oil exporting212
    Offshore centers858
    Other transactors12
    Unidentified depositors6814
    Change in net claims on4
    Industrial countries14–11–3
    Of which: United States121718
    Developing countries22–11
    Oil exporting106
    Offshore centers–1–3–6
    Other transactors1
    Unidentified (net)–18–127
    Sources: International Monetary Fund, International Financial Statistics (IFS); and Fund staff estimates.
    Table 8.Cross-Country Comparison of Components of External Assets and Liabilities, December 1984(In billions of U.S. dollars)
    Cross-Border Interbank Accounts by Residence of Borrowing BankInternational Bank Credits to Nonbanks by Residence of BorrowerTotal External Liabilities of Banks and Nonbanks to BanksCross-Border Interbank Accounts by Residence of Lending BankInternational Bank Deposits of Nonbanks by Residence of DepositorTotal External Assets of Banks and Nonbanks with Banks
    Industrial countries1,311.9276.41,588.31,316.4305.81,622.2
    Major industrial countries11,028.5172.11,200.6967.6234.91,202.5
    Other industrial countries283.4104.2387.6348.870.919.7
    Centrally planned economies230.88.739.519.80.620.4
    German Democratic Republic6.
    Oil exporting countries25.
    Iran, Islamic Republic of2.
    Saudi Arabia2.27.69.848.214.562.7
    United Arab Emirates5.
    Offshore centers3381.533.1414.6365.145.4410.5
    Non-oil developing countries4208.1261.4469.3137.7132.4270.1
    Ivory Coast0.
    South Africa1.310.
    Middle East15.77.623.321.826.047.8
    Syrian Arab Republic2.
    Western Hemisphere104.1156.2260.338.968.9107.8
    Unallocated and international organizations32.680.1112.727.2115.1142.3
    Of which: International organizations32.67.039.627.26.834.0
    Sources: International Monetary Fund, International Financial Statistics; and Fund staff estimates.
    Table 9.Bank Debt of Selected Developing Countries, December 19841(In billions of U.S. dollars)
    China, People’s Republic of5.54
    Costa Rica101.66
    Dominican Republic30.95
    El Salvador30.28
    Iran, Islamic Republic of123.11
    Ivory Coast32.15
    Libyan Arab Jamahiriya30.36
    Papua New Guinea30.55
    Saudi Arabia9.75
    Sierra Leone0.24
    South Africa11.48
    Sri Lanka0.93
    Syrian Arab Republic132.31
    Trinidad and Tobago0.80
    United Arab Emirates38.00
    Yemen Arab Republic30.24
    Source: International Monetary Fund, International Financial Statistics.
    Table 10.International Bond Issues and Placements, 1978–841(In millions of U.S. dollars)
    Foreign bonds20,71320,30817,92420,51425,19927,05027,801
    Industrial countries10,32813,42111,33914,12916,85418,69318,299
    Developing countries2,5831,4317461,2127268941,618
    Oil exporting571105462423878
    Centrally planned economies243
    International organizations4,9065,2595,7145,0307,4617,2697,580
    Industrial countries9,77414,21217,20625,21042,81641,01573,145
    Developing countries3,1621,8851,4033,2153,9702,3823,646
    Oil exporting1,110329132170470288325
    Centrally planned economies2303055
    International organizations1,8202,2201,7102,4863,2806,0744,218
    International bonds335,67438,99938,31851,80875,52777,148109,518
    Industrial countries20,10227,63328,54539,33959,67059,70891,445
    Developing countries5,7453,3162,1494,4274,6953,2765,264
    Oil exporting1,681434178412508366325
    Centrally planned economies2307355
    International organizations6,7267,4797,4247,51610,74113,34411,798
    Source: Organization for Economic Cooperation and Development, Financial Statistics Monthly.
    Table 11.Bank Debt Falling Due in the Next Year as a Percentage of Total Bank Debt, 1978–841
    Non-oil developing countries49504444454645
    Middle East72677067666770
    Western Hemisphere51514847474444
    Restructuring countries247454339394335
    Other countries50544546464750
    Oil exporting countries54596258606465
    Restructuring countries345454548474456
    Other countries55597266716969
    Source: Calculations based on data from the Bank for International Settlements, The Maturity Distribution of International Bank Lending.
    Table 12.Bank Debt Falling Due in the Next Year as a Ratio of Total Claims on Banks, 1978–831
    Non-oil developing countries0.660.660.830.961.081.03
    Middle East0.
    Western Hemisphere0.831.170.741.061.240.89
    Restructuring countries21.
    Oil exporting countries0.430.360.280.310.380.48
    Restructuring countries30.960.700.561.031.651.66
    Source: Calculations based on data from the Bank for International Settlements, The Maturity Distribution of International Bank Lending.
    Table 13.Undisbursed Commitments as a Percentage of Total Bank Debt, 1978–841
    Non-oil developing countries233232218131217
    Middle East90824542312431
    Western Hemisphere362121178107
    Restructuring countries331191613987
    Oil exporting countries235393428222327
    Restructuring countries2,43642343627138
    Source: Calculations based on data from the Bank for International Settlements, The Maturity Distribution of International Bank Lending.
    Table 14.Capital-Asset Ratios of Banks in Selected Industrial Countries, 1977–831(In percent)
    Germany, Federal Republic of53.413.323.313.273.263.313.34
    Largest 5 banks6.
    All banks5.595.685.635.665.365.255.16
    United Kingdom
    Largest 4 banks107.147.537.186.856.396.286.59
    All banks115.
    United States
    Nine money center banks124.954.734.514.524.624.935.41
    Next 15 banks125.725.425.375.515.215.345.69
    All reporting banks12,135.705.535.295.355.385.605.94
    Sources: Fund staff calculations based on data from official sources, as indicated in footnotes.
    Table 15.Concerted Lending: Commitments and Disbursements, 1983–841(In millions of U.S. dollars)




    Medium-term loan1,5005003,7002
    Trade deposit facility5002
    Medium-term loan4,4004,4006,5006,500
    Medium-term loan1,3001,300780780
    Medium-term loan431431
    Ivory Coast
    Medium-term loan1133
    Medium-term loan5,0005,0003,8002,850
    Medium-term loan4502501004
    Medium-term loan9252
    Medium-term loan240240
    Medium-term loan600600
    Source: Table 17.
    Table 16.Short-Term Debt Rolled Over or Converted Into Medium-Term Loans, 1983–84(In millions of U.S. dollars)
    Stand-by money market facility1,400
    Trade credit maintenance facility1,2001,2
    Trade credit and deposit facility500
    Interbank exposure6,0006,000
    Trade related credits9,8009,800
    Trade related credits1,7001,7003
    Nontrade related credits1,2001,200
    Costa Rica
    New revolving trade facility202202
    Trade related credits700700
    Short-term debt117
    Interbank exposure5,2005,200
    Short-term debt1,000
    Short-term working capital1,20049655
    Short-term trade related credit80048005
    Short-term debt of:
    Private financial sector649
    Corporate sector490
    Revolving trade facility2,975
    Nontrade related credits425425
    Nontrade related credits200200
    Revolving trade facility600600
    Source: Table 17.
    Table 17.Terms and Conditions of Bank Debt Restructurings and Bank Financial Packages, 1978–June 1985
    Country, Date of Agreement, and Type of Debt RescheduledBasisAmount ProvidedGrace PeriodMaturityInterest Rate
    (US$ millions)(In years, unless otherwise noted)tin percent spread over L1BOR/U.S. Prime)
    Bridging loan (1982)11,30027 months14 months1⅝-1½
    New medium-term loan (1983)New financing1,500341½21¼-21⅛
    Agreement in principle3 with Working Committee (December 3, 1984):
    Refinancing of medium- and long-term debt
    Public arid publicly guaranteed debt
    Due in 1982 and 1983100Percentofprincipal100Percentofprincipal}16,5523101⅜-1⅜
    Due in 1984 and 19853121⅜-1⅜
    Private sector nonguaranteed debt3101⅜-1⅜
    New medium-term loanNew financing3,7003101⅝-1¼
    New trade credit deposit facility50041⅜-1
    Trade credit maintenance facilityBanks would maintain trade credit at levels of September 30, 1984 (estimate)1,2001⅛-¾
    Stand-by money market facultyBanks would make available to the Central Bank on request any amounts outstanding to foreign branches and agencies of Argentine banks on September 30, 19841.400¼
    Deferment agreement of August 1980 and December 1980: short- and medium-term debt falling due August 1980–Marcb 1981100 percent of principal200to April 1981
    Refinancing agreement of April 1981:
    Conversion and consolidation of:
    Deferred short-term debt80 percent of principal9922
    Deferred medium-term debt90 percent of principal6937
    Refinancing of debt:
    Due April 1981–March 198290 percent of principal12036
    Due April 1981–March 1983490 percent of principal12425
    Normalization plan of May 1983:5
    Principal payments falling due April 1–October 6, 1983Moratorium on 100 percent of principal87Originally contracted rates
    Arrears on interest paymentsNew schedule of payments6118Within September 1983
    Interim plan of October 1983:
    Deferment of:
    Obligations arising from 1981 rescheduling100 percent of principal482 more years
    Maturities failing due April 1983–January 1984100 percent of principal2614
    Agreement of February 25, 1963:
    Rescheduling of:
    Medium- and long-term debt due in 1983{100percentofprincipal4,532882⅛-1⅞9
    Short-term debt (1983) (trade related)100 percent rollover in 19839,800
    New loan commit merits (1983)New financing4,40082⅛-1⅞10
    Agreement of January 27, 1984:
    Rescheduling of:
    Medium- and long-term debt due in 1984100 percent of principal5,2137592–1¾
    Short-term debt (1984) (trade related)100 percent rollover9,800
    New loan commitment (1984)New financing6,500592–1¾
    Requested by the authorities (December 1984):
    Rescheduling of public and private sector debt due in 1985–91Principal44,800up to 81116⅞-1¼
    Agreement of July 28, 1983:
    New loan agreed in principleNew financing1.300472¼-2⅛
    Rescheduling of medium-term debt due:
    In 1983100 percent of principal1.200482⅛-2
    In 1984100 percent of principal1.000482⅛-2
    Rollover of trade related100 percent rollover until1,700
    short-term debt:December 1984
    Agreement of January 25, 1984:
    Short-term nontrade related debt converted to medium-term debt100 percent of principal1,200482⅛
    Agreement of June 14, 1984:
    New loanNew financing780591¾-1½
    Agreememt of November 26, 1984:
    Continuation of rollover of short-term trade related line of credit until June 30, 19851,7006 monthsOriginally contracted rates
    Moratorium on public and private debt
    Due in January-March 1985100 percent of principal2986 monthsOriginally contracted rates
    Due in April-June 1985100 percent of principal6 monthsOriginally contracted rates
    Costa Rica
    Agreement of September 10, 1983 (amendment agreed in principle in January 3985):
    Principal; in arrears prior to 198397½ percent3632¼-2⅛
    Principal failing due in 198397½ percent1102¼-2⅛
    Principal falling due in 1984100 percent1362¼-2⅛
    Certificates of deposit:12
    Falling due prior to 1983100percentofprincipalandinterestaccruedpriorto1983100percentofprincipal}48
    Falling due in 198410058
    New revolving facility13Revolving credit equivalent to 50 percent of interest payments actually paid in 1983202231¾-1⅝
    Agreement in principle with Steering Committee (January 1985):
    Increase in revolving facility originally agreed in September 1983New financing7561¾-1⅝
    Rescheduling of principal falling due in 1985 and 1986100 percent4403101⅝-1⅝14
    Dominican Republic
    Agreement of December 21, 1983:
    LettersofcreditoutstandingonNovember30,1982,andinarrearsatthatdateCentralBankacceptancesPublicandprivatedebtinarrearsasofNovember30,1983PublicandprivatedebtfallingduebetweenDecember1,1982December31,1983}95 percent }500152¼-2⅛
    Agreement in principle with Steering Committee {May 1985):
    Rescheduling of public and private debt
    In arrears as of December 31, 1984100 percent1683131⅜
    Due in 1985–89100 percent7073131⅜
    Agreement of October 1983:
    Refinancing of private debt failing due in 1983100 percent of principal940172¼-2⅛
    Refinancing of public debt falling due in 1983 (effective December 31, 1983)1590 percent of principal895 (including 580 in short-term debt)162¼-2⅛
    New loanNew financing43162⅜-2¼
    Trade credit100 percent rollover until December 19847001½-1⅝
    Agreement in principle with Steering Committee [December 1984):
    Refinancing of the 1985–89 public sector debt100percentofprincipal}4,3603121⅜
    Rescheduling of deposit facility falling due in 1985–89
    Rescheduling of 1983 loan100 percent of principal4312101⅝-1¼
    Extension of trade finance700
    Deferment agreement of June 1982:16
    Public and publicly guaranteed medium- and long-term debt due during March 11, 1982–March 31, 1983100 percent of principal15
    Deferment agreement of July 1983:
    Amount deferred in June 1982, plus amount due until January 1984100 percent of principal24
    Deferment agreement of January 1984:
    Amount deferred in July 1983, plus amount due until July 1984100 percent of principal29
    Deferment agreement of July 1984:
    Amount deferred in January 1984 plus amount due until July 1985100 percent of principal42
    Requested by the authorities in January 1982:17
    Refinancing of medium- and long-term debt [public entities):
    Due 1981 (arrears)100 percent of principal119 months6
    Due 1982 (arrears)100 percent of principal419 months6
    Due 1983 (arrears)100 percent of principal3f>3–15 months186
    Due 1984100 percent of principal323–15 months186
    Agreement in principle with Steering Committee (December 1984):19
    Extension of principal due (including principal in arrears through 1984) until end of 1985100 percent of principal1481⅞
    Refinancing, in 1986, of:20
    Deferred principal due through end of 1985100 percent of principal148210
    Principal falling due after 1986100 percent of principal721–2217–9
    Ivory Coast
    Agreement of March 1, 1985:
    Public and publicly guaranteed medium- and long-term debt:
    Due December 1983 and 1984100 percent of principal280271⅞-1⅝
    Due 198590 percent of principal221381⅞-1⅝
    New loan104371⅞-1⅝
    Agreement of September 1978:
    Due April 1978–March 1979⅞ of principal632225222
    Agreement of April 1979:
    Due April 1979–March 1980⅞ of principal2377252
    Due April 1980–March 1981⅞ of principal2372252
    Agreement of June 1981:
    Due April 1981–Marcb 1983100 percent of principal89252
    Of which: 1982–1983100 percent of principal41252
    Syndicated loan (July 1981)New financing7137
    Other new loans (March 1982)New financing1827
    Agreement of June 1984:
    Due July 1983–March 1984100 percent of principal6525
    Due April 1984–March 1985100 percent of principal10025
    Agreement of December 1, 1982:24
    Due July 1, 1981–June 30, 198395 percent of principal3036
    In process:
    Maturities falling due during July 1983–June 198595 percent of principal3536
    Agreement of July-November 1981:
    Rescheduling of arrears on overdrafts100 percent of principal14725
    Agreement of October 25, 1984:26
    Global restructuring of outstanding public debt27
    Of which: in arrears100 percent of principal70
    Of which: future in at unties100 percent of principal126
    Agreement of March 6, 1983:
    Medium- and long-term debt
    Due September 1982–August 198385 percent of principal2831⅞
    Due September 1983–Augusl 198485 percent of principal2931⅞
    Agreement of August 27, 1983:28
    Rescheduling of public sector short-, medium-, and long-term debt29 due August 23, 1982–December3l, 1984100 percent of principal18,800481⅞-1¾
    Syndicated loan30New financing (net)5,000362ft-2ft M4
    Settlement of interest in arrears on private sector’s debt311,3671-⅞
    Agreement of April 1984:
    New loanNew financing3,800101¼-1⅛
    Agreement in principle of September 8, 1984:32
    Rescheduling of public medium-and long-term debt not previously rescheduled failing due from 1985 to 1990100 percent of principal20,10011432{in1986861in1987911¼in199298
    Rescheduling of public medium and long-term debt previously rescheduled
    Due in 1987100 percent of principal5,8001432{in1986861in1987911¼in199298
    Due from 1988 to 1990100 percent of principal17,8001432
    Rescheduling of 1983 syndicated loan335,0005101½-1⅛
    Agreement in principle of January 1984:
    Medium- and long-term debt due September 9, 1983–December 31, 1983100percentofprincipal90percentofprincipal}48
    Medium- and long-term debt due in 198453048
    Rollover of short-term debt750
    People’s Republic of Mozambique
    Preliminary discussions on bank debt1,400
    Agreement of December 1980:
    Arrears on interest or due up to December 19803475 percent of arrears and amount due905}¾1¼,butwithdeferredinterestpaymentprovisionandinterestrecaptureclause35
    Arrears on principal as of December 197935100 percent of arrears on principal252511
    Due after December 1979100 percent of principal240512
    Agreement of December 1981 (debt of nationalized banks):
    Accumulated arrears100percentofinterestandprincipal90percentofprincipal}192511}¾1¼,butwithdeferredinterestpaymentprovisionandrecaptureclause35
    Principal due after September 1981510
    Agreement of March 1982 (debt of nationalized enterprises and of private enterprises):
    Accumulated arrears90 percent of interest and principal}¾1¼,butwithdeferredinterestpaymentprovisionandrecaptureclause
    Due after March 1982100 percent of principal100510
    Agreement of February 1984:
    Rescheduling of principal and interest due July 1983–June 1984 (previously rescheduled in 1980–82)95–100 percent of principal1458361¼-1¾
    In process of negotiation:
    Principal and interest due July 1984–June 1985 (previously rescheduled in 1980–82)95–100 percent of principal120
    Agreement of March 9, 1984:
    Rescheduling of medium-term debt:
    Due October 1983–September 198490 percent of principal12Originally contracted rate + 2 percent
    Due October 1984–September198590 percent of principal15Originally contracted rate + 2 percent
    Agreement of July 1983:
    Arrears as of end-March 1983100 percent of arrears on letters of credit1,3505½ months31½-1⅜
    Agreement of September 1963:
    Arrears as of end-July 1983100 percent of arrears on letters of credit5853½ months2⅚1½-1⅜
    In process of negotiation:
    Public sector debt
    Due in 1985Principal225121⅜
    Due in 1986Principal377121⅜
    New loanNew financing60391⅝-1¼
    Short-term credit linesPrincipal190
    Agreement of June 1978:
    Due during second semester of 1978Rollover of 100 percent of principal18638Due January 3, 1979
    Agreement of December 1978:
    Due in 197990precentofprincipal90precentofprincipal50percentoramountrolledover}261⅞
    Due in 19802003825
    Due in January 1979 as per June 1978 agreement1
    Agreement of January 1930:39
    Due in 198090 percent of principal3403825
    Agreement of July 1983:
    Medium- and long-term maturities falling due between March 7, 1983 and March 7, 1984100 percent38038
    Bridge loan200
    New loanNew financing45038
    Short-term credit lines outstanding as of March 7, 1983100 percent of principal2,000401
    Agreement in principle of February 1984:41
    Medium- and long-term maturities falling due between March 7, 1984 and June 30, 1985100 percent460591⅝-1¼
    Short-term working capital outstanding on March 6, 1984100 percent965591⅝-1¼
    Loan covering the undisbursed portion of the 1983 new loanNew financing20038
    Short-term trade related credit lines committed as of March 6, 1984100 percent800Rollover⅛ + 1½: percent acceptance commission
    Agreement in principle with Advisory Committee (October 17, 1984):
    Rescheduling of public sector debt, medium- and long-term:
    Due between October 17, 1933 and December 31, 1985100 percent of principal91854210421⅝
    Due in 1986100 percent of principal57454210421⅝
    Rescheduling of private financial sector debt medium- and long-term:
    Due between October 17, 1983 and December 31, 1985100 percent of principal13054210421⅝
    Due in 1986100 percent of principal9354210421⅝
    Short-term debt64944Less than 2
    Rescheduling of corporate debt medium- and long-term:
    Due between October 17, 1983 and December 31, 1985100 percent of principal384
    Due in 1986100 percent of principal270
    Short-term debt490
    New medium-term loanNew money92559
    Revolving short-term trade facilityTrade related outstanding and central bank overdrafts as of October 17, 19832,975Revolving per annum
    Agreement of December 7, 1982:
    Arrears on the 1981 debt obligations80percentofsuchdebtobligations80percentofprincipal}3
    Due in 1982 on all debts (including short-term)1.5983
    Agreement of June 20, 1983:}10percentofprincipal60percentofprincipal81
    Medium- and long-term due in 1983486
    Agreement of February 1984:
    Due between May 1, 1981 and June 30, 1982 (including arrears)100percentofprincipal100percentofprincipal}3
    Due between July 1, 1982 and June 30, 1984
    Agreement in principle with Steering Committee (May 7, 1985):
    Due between July 1, 1984 and June 30, 198680 percent of principal4320372
    Sierra Leone
    Agreement of January 1984:
    Principal arrears100 percent2527
    Agreement of December 1981: Arrears on principal as of end-1979100percent60percent100percent40percent}38337
    Arrears on interest due:
    Period January-June 1980
    Period July 1980–April 198211513
    Excess balances on Nostro accounts over end-1979 level
    Modification of December 1981 agreement (March 1982)
    Arrears on interest as of end-1979
    Arrears on interest due January-June 1980}40percent60percent}555 months9 months
    Excess balance on Nostro accounts over end-1979 level
    Modification of December 1981 agreement (April 1983)
    Principal and interest100 percent79026
    Modification of December 1981 agreement (April 19841
    Principal and interest100 percent83815
    Agreement of March 1980:
    Arrears as of end of 1979100 percent of arrears
    Interest8Settlement to be in made in 1980 in 3 equal installmentsOriginal rates maintained. However, spreads on Euroloan reduced to 1¼.
    Principal176 months
    Due in 1980 on a number of specific loans100 percent of principal441Original rates maintained
    Agreement of October 1983:
    Arrears as of end of 1982100 percent of arrears582
    Due in 1983 and 1984 on medium-and long-term public and publicly guaranteed loans100 percent of principal262
    Eurocurrency loan of June 197944New financing (net)40737
    Agreement of June 1979:
    Bankers’ credits100 percent of principal4294537
    Agreement of August 1979:
    Convertible Turkish lira deposits46100 percent of principal2.2694637
    Agreement of August 1981:
    Third-party reimbursement claims100 percent of principal1003
    Agreement of March 1982:
    Improve the maturity profile of the August 1979 rescheduling agreement100 percent of principal47248348
    Agreement of July 29, 1983:
    New medium-term loan240262¼-2⅛
    Short-term nontrade re Sated credits90 percent of principal425262¼-2⅛
    Medium-term maturities falling due in 198390 percent of principal39262¼-2⅛
    Medium-term maturities falling due in I9S490 percent of principal111262¼-2⅛
    Deferment agreement of December 14, 1984:
    Public sector debt dur January-June 1985Principal1206–month extensionOriginally contracted rates
    Agreement with Steering Committee (September 1984):49
    Rescheduling of medium- and long-term debt falling due during 1983–88Principal21,20312½501⅛
    Agreement of September 1983:
    Refinancing of:
    Medium-term loans due in 1983100 percent of principal950361⅞-1¾
    Short-term debtRolled over (through either 1983 or 1984
    Nontrade related credits200221⅜-1¾
    Revolving trade facility600221⅜-1¾
    New syndicated loanNew financing (net)600361⅜-1¾
    Agreement of May 16, 1984:51
    Refinancing of:
    Medium- and long-term maturities falling due in 1984100 percent or principal1,200471⅝-1½
    In process:
    Refinancing of public sector debt falling due in 1985–89100 percent of principal3,500511
    Agreement of April 1980:
    Arrears on principal as of end of 197976 percent of principal2875101⅞ for first 5 years, 2 thereafter
    Principal payments due after end of 1979100 percent of principal1155101⅞ for first 5 years, 2 thereafter
    Deferment agreement of January 1933:53Principal58Originally contracted rate
    Deferment agreement of June 1984:54Principal64Originally contracted rate
    Agreement with Steering Committee (December 1984):
    Refinancing of medium- and long-term public and publicly guaranteed unsecured debt in arrears as of February 28, 1983100 percent of principal16155
    Due March 1, 1983–February 29, 1984100 percent of principal2614
    Due March 1, 1984–February 28, 1985100 percent of principal2125
    Due March 1, 1985–December 31, 19855690 percent of principal1136
    Memorandum items:
    Non-Fund members
    Agreement of December 30, 1983:
    Rescheduling principal payments on medium-term debt due between September 1, 1982 and December 31, 1984100 percent of principal1282
    Rollover of short-term credit57490¼
    Agreement or April 1982:58
    Medium-term debt due March 26, 1981–December 198195 percent of principal2,30047
    Agreement of November 1962:59
    Medium-term debt due in 1982, including arrears on unrescheduled maturities due in 198195 percent of principal2,30041¾-1½
    Agreement of November 1983:60
    Medium-term debt due during 198395 percent of principal1,4005101⅜
    Agreement of April 28, 1984:
    Medium- and long-term debt due in 1984–198795 percent of principal1,615510
    New trade credits61New financing23551⅛
    Rollover of short-term credit facility61465
    Sources: Restructuring agreements; press reports; and Fund staff calculations.
    Table 18.New Publicized Long-Term External Bank Credit Commitments to Developing Countries, 1979–84(In billions of U.S. dollars)




    Developing countries50.938.548.144.234.926.521.213.718.28.3
    Oil exporting7.
    Spontaneous lending27.
    Concerted lending20.60.6
    Middle East0.
    Western Hemisphere23.017.523.818.915.111.610.54.611.40.2
    Spontaneous lending223.017.523.818.
    Concerted lending213.3311.
    Sources: Organization for Economic Cooperation and Development, Financial Statistics Monthly; and Fund staff estimates.
    Table 19.External Assets of BIS Reporting Banks by Maturity and Undisbursed Credit Commitments, December 1980–December 19841(In billions of U.S. dollars)
    December 1980December 1981December 1982December 1983December 19842
    External AssetsExternal AssetsExternal AssetsExternal AssetsExternal Assets
    TotalUp to and including one yearUndisbursed credit commitmentsTotalUp to and including one yearUndisbursed credit commitmentsTotalUp to and including one yearUndisbursed credit commitmentsTotalUp to and including one yearUndisbursed credit commitmentsTotalUp to and including one yearUndisbursed credit commitments
    Claims on:
    Industrial countries outside the BIS reporting area50.521.715.757.525.318.367.329.420.169.831.120.480.836.120.9
    Oil exporting developing countries64.634.316.167.838.616.974.841.416.781.345.516.779.445.016.1
    Iran, Islamic Republic of5.
    Non-oil developing countries262.9119.659.9313.7144.761.2345.4160.248.2364.9163.848.9368.1138.045.4
    Ivory Coast3.
    South Africa7.
    Middle East13.610.42.816.312.72.819.615.22.920.215.62.813.58.92.9
    Centrally planned economies348.418.
    German Democratic Republic9.93.81.510.
    Source: Bank for International Settlements, The Maturity Distribution of International Bank Lending.
    Table 20.Terms on New Publicized Long-Term International Bank Credit Commitments, 1979–84(In percent, unless otherwise indicated)
    197919801981198219831984First halfSecond halfFirst halfSecond half
    Six-month Eurodollar interbank rate (average)12.0014.1516.5213.319.7711.049.4410.1111.2710.81
    U.S. prime rate (average)12.6615.2618.8714.8610.7912.1310.6910.9011.6912.56
    Average maturity (in years/months)8/87/97/87/77/37/97/77/08/57/4
    OECD countries8/118/07/88/37/87/48/17/37/87/4
    Centrally planned economies8/06/75/74/94/55/115/56/2
    Oil exporting countries8/07/37/96/07/27/77/07/57/67/8
    Other developing countries8/87/87/97/07/08/117/26/89/27/10
    Average spread0.790.740.800.771.150.931.
    OECD countries0.620.590.580.560.650.550.640.650.680.48
    Centrally planned economies0.700.880.621.031.180.880.720.94
    Oil exporting countries11.050.770.790.940.850.760.731.040.710.80
    Other developing countries0.850.911.041.141.701.441.701.561.600.64
    Sources: Organization for Economic Cooperation and Development (OECD), Financial Market Trends; International Monetary Fund; Morgan Guaranty Trust, World Financial Markets (for Eurodollar rate); Federal Reserve Bulletin (for prime rate); and unpublished data from the OECD (for details on maturities).
    Table 21.Average Repayment Terms for Current Interest Under Official Debt Restructurings, 1975–841
    Postponement of Unconsolidated

    Formally Rescheduled Portion
    Downpayment (In percent)Proportion of total repayment (In percent)Average grace period (In months)Average maturity (In months)Proportion of total repayments (In percent)Average grace period (In years)Average maturity (In years)
    Source: Agreed Minutes of debt reschedulings.
    Table 22.Average Repayment Terms for Current Principal Under Official Debt Restructurings, 1975–841
    Postponement of Unconsolidated

    Formally Rescheduled Portion
    Downpayment (In percent)Proportion of total repayment (In percent)Average grace period (In months)Average maturity (In months)Proportion of total repayments (In percent)Average grace period (In years)Average maturity (In years)
    Source: Agreed Minutes of debt reschedulings.
    Table 23.Average Repayment Terms for Current Maturities on Official Debt Restructurings, 1975–841
    Postponement of Unconsolidated

    Formally Rescheduled Portion
    Downpayment (In percent)Proportion of total repayment (In percent)Average grace period (In months)Average maturity (In months)Proportion of total repayments (In percent)Average grace period (In years)Average maturity (In years)
    Source: Agreed Minutes of debt reschedulings.

    The earlier studies were: Bahram Nowzad and Richard C. Williams, External Indebtedness of Developing Countries, Occasional Paper No. 3 (Washington: International Monetary Fund, May 1981); E. Brau and R.C. Williams, Recent Multilateral Debt Restructurings with Official and Bank Creditors, Occasional Paper No. 25 (Washington: International Monetary Fund, December 1983).

    International Monetary Fund, World Economic Outlook, April 1985: A Survey by the Staff of the International Monetary Fund (Washington).

    The IBS are published in the Fund’s International Financial Statistics (IFS) and a description of the methodology used is provided both in the introductory pages of the IFS, and in an article, “Fund’s Compilation of International Bank Data,” on page 184 of the IMF Survey dated June 18, 1984.

    Tables 5 through 23 are in Appendix IV.

    For a further discussion of the causes of earlier debt-servicing problems, see Occasional Paper Nos. 3 and 25, cited in footnote 1.

    The Basle Committee on Banking Regulations and Supervisory Practices.

    International Monetary Fund, Foreign Private Investment in Developing Countries, Occasional Paper No. 33 (Washington, January 1985).

    The impact of these policies on lending to developing countries is discussed in Eduard H. Brau and Chanpen Puckahtikom, Export Credit Cover Policies and Payments Difficulties, Occasional Paper No. 37 (Washington: International Monetary Fund, August 1985).

    See Table 17 for an overview of the terms of debt restructurings on which agreement, at least in principle, was reached with banks between 1978 and June 1985.

    The OECD data on new long-term external commitments (Table 20) cover new publicized long-term bank loans—including not only syndicated loans, but also “Club” deals and single bank loans—signed or completed during a certain period, which have an original maturity of more than one year. They are not directly comparable to other data on lending referred to in the text, both because the amounts committed are not necessarily disbursed during the period (in some cases, they are never disbursed), and because they relate to gross commitments and do not take account of amortization. These data nevertheless provide a useful indication of trends in the international banking markets.

    These data relating to maturities exclude agreements in principle for concerted lending to Argentina, the Philippines, and Ivory Coast.

    Current maturities comprise all principal and interest falling due in the consolidation period (see Appendix II).

    See Occasional Paper No. 37, cited in footnote 8.

    A more extensive discussion of the treatment of nonguaranteed suppliers’ credits is provided in Appendix III of this paper.

    See Statistical Appendix to the World Economic Outlook, April 1985: A Survey by the Staff of the International Monetary Fund (Washington) for a detailed description of the new country classification. The term “country” in the classification used in this paper does not in all cases refer to a territorial entity which is a state as understood in international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis. The list in this classification does not include countries or territorial entities for which data are not currently reported for publication in International Financial Statistics (IFS). The coverage of particular statistical tables in this report is often more limited, being confined to countries for which the relevant data on a given subject are available. Also, for certain World Economic Outlook data, excluded from this coverage are a considerable number of dependent territories for which certain statistics are regularly compiled (e.g., in IFS) but which do not maintain foreign exchange reserves or encounter balance of payments problems in the usual sense.

    Frequently, available information is limited. In particular, the quality of the information on nonguaranteed suppliers’ credits is deficient for virtually all of the debtor countries—except in instances where data have become available after comprehensive audits of the debt data base were undertaken, usually in conjunction with multilateral debt reschedulings.

    The question of private claims without the guarantee of official creditors was first raised by official creditors in the 1979 Agreed Minute and was addressed again in the 1980 Agreed Minute when the Turkish authorities undertook to resolve the problem without delay, in conformity with prevailing international trade practices and with the legislation of each concerned country.

    The time of settlement was specified as the date payments were made by the Central Bank to creditors abroad.

    Occasional Papers of the International Monetary Fund

    1. International Capital Markets: Recent Developments and Short-Term Prospects, by a Staff Team Headed by R.C. Williams, Exchange and Trade Relations Department. 1980.

    2. Economic Stabilization and Growth in Portugal, by Hans O. Schmitt. 1981.

    3. External Indebtedness of Developing Countries, by a Staff Team Headed by Bahram Nowzad and Richard C. Williams. 1981.

    4. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1981.

    5. Trade Policy Developments in Industrial Countries, by S.J. Anjaria, Z. Iqbal, L.L. Perez, and W.S. Tseng. 1981.

    6. The Multilateral System of Payments: Keynes, Convertibility, and the International Monetary Fund’s Articles of Agreement, by Joseph Gold. 1981.

    7. International Capital Markets: Recent Developments and Short-Term Prospects, 1981, by a Staff Team Headed by Richard C. Williams, with G.G. Johnson. 1981.

    8. Taxation in Sub-Saharan Africa. Part I: Tax Policy and Administration in Sub-Saharan Africa, by Carlos A. Aguirre, Peter S. Griffith, and M. Zühtü Yücelik. Part II: A Statistical Evaluation of Taxation in Sub-Saharan Africa, by Vito Tanzi. 1981.

    9. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1982.

    10. International Comparisons of Government Expenditure, by Alan A. Tait and Peter S. Heller. 1982.

    11. Payments Arrangements and the Expansion of Trade in Eastern and Southern Africa, by Shailendra J. Anjaria, Sena Eken, and John F. Laker. 1982.

    12. Effects of Slowdown in Industrial Countries on Growth in Non-Oil Developing Countries, by Morris Goldstein and Mohsin S. Khan. 1982.

    13. Currency Convertibility in the Economic Community of West African States, by John B. McLenaghan, Saleh M. Nsouli, and Klaus-Walter Riechel. 1982.

    14. International Capital Markets: Developments and Prospects, 1982, by a Staff Team Headed by Richard C. Williams, with G.G. Johnson. 1982.

    15. Hungary: An Economic Survey, by a Staff Team Headed by Patrick de Fontenay. 1982.

    16. Developments in International Trade Policy, by S.J. Anjaria, Z. Iqbal, N. Kirmani, and L.L. Perez. 1982.

    17. Aspects of the International Banking Safety Net, by G.G. Johnson, with Richard K. Abrams. 1983.

    18. Oil Exporters’ Economic Development in an Interdependent World, by Jahangir Amuzegar. 1983.

    19. The European Monetary System: The Experience, 1979–82, by Horst Ungerer, with Owen Evans and Peter Nyberg. 1983.

    20. Alternatives to the Central Bank in the Developing World, by Charles Collyns. 1983.

    21. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1983.

    22. Interest Rate Policies in Developing Countries: A Study by the Research Department of the International Monetary Fund. 1983.

    23. International Capital Markets: Developments and Prospects, 1983, by Richard Williams, Peter Keller, John Lipsky, and Donald Mathieson. 1983.

    24. Government Employment and Pay: Some International Comparisons, by Peter S. Heller and Alan A. Tait. 1983. Revised 1984.

    25. Recent Multilateral Debt Restructurings with Official and Bank Creditors, by a Staff Team Headed by E. Brau and R.C. Williams, with P.M. Keller and M. Nowak. 1983.

    26. The Fund, Commercial Banks, and Member Countries, by Paul Mentre. 1984.

    27. World Economic Outlook: A Survey by the Staff of the International Monetary Fund. 1984.

    28. Exchange Rate Volatility and World Trade: A Study by the Research Department of the International Monetary Fund. 1984.

    29. Issues in the Assessment of the Exchange Rates of Industrial Countries: A Study by the Research Department of the International Monetary Fund. 1984

    30. The Exchange Rate System—Lessons of the Past and Options for the Future: A Study by the Research Department of the International Monetary Fund. 1984

    31. International Capital Markets: Developments and Prospects, 1984, by Maxwell Watson, Peter Keller, and Donald Mathieson. 1984.

    32. World Economic Outlook, September 1984: Revised Projections by the Staff of the International Monetary Fund. 1984.

    33. Foreign Private Investment in Developing Countries: A Study by the Research Department of the International Monetary Fund. 1985.

    34. Adjustment Programs in Africa: The Recent Experience, by Justin B. Zulu and Saleh M. Nsouli. 1985.

    35. The West African Monetary Union: An Analytical Review, by Rattan J. Bhatia. 1985.

    36. Formulation of Exchange Rate Policies in Adjustment Programs, by a Staff Team Headed by G.G. Johnson. 1985.

    37. Export Credit Cover Policies and Payments Difficulties, by Eduard H. Brau and Chanpen Puckahtikom. 1985.

    38. Trade Policy Issues and Developments, by Shailendra J. Anjaria, Naheed Kirmani, and Arne B. Petersen. 1985.

    39. A Case of Successful Adjustment: Korea’s Experience During 1980–84, by Bijan B. Aghevli and Jorge Marquez-Ruarte. 1985.

    40. Recent Developments in External Debt Restructuring, by K. Burke Dillon, C. Maxwell Watson, G. Russell Kincaid, and Chanpen Puckahtikom. 1985.

    International Monetary Fund, Washington, D.C. 20431, U.S.A. Telephone number 202 623–7430 Cable address: Interfund

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