—the terms agreed upon in a Paris Club rescheduling meeting are embodied in an Agreed Minute. The Minute normally specifies the coverage of debt service payments to be consolidated, the cutoff date, the consolidation period, the proportion of payments to be rescheduled, the provisions regarding the down payment, and the repayment schedule for both the rescheduled and deferred debt. Delegates to the meeting undertake to recommend to their governments the incorporation of these terms in the bilateral agreements that implement the rescheduling.

—an association founded in 1934 of 36 export credit insurance agencies, all participating as insurers and not as representatives of their governments. The main purposes of the Union are to work for sound principles of export credit insurance and maintenance of discipline in the terms of credit in international trade. To this end, members exchange information and furnish the Union with relevant information and consult together on a continuing basis.

—agreements reached bilaterally between a debtor country and each of the creditor countries participating in a Paris Club rescheduling. The agreements establish the legal basis of the debt rescheduling as set forth in the Agreed Minute. Bilateral agreements specify the interest rate on amounts deferred or rescheduled (moratorium interest), which is agreed bilaterally between the debtor and each creditor.

—a date, specified in the Agreed Minute, by which all of the bilateral agreements must be concluded. The period for concluding bilateral agreements is now generally six to seven months from the date of the Agreed Minute.

—a financial agreement in which a bank, other financial institution, or an export credit agency in the exporting country extends a loan directly to a foreign buyer or to a bank in the importing country.

—the period for which exporters/ banks must wait after payments delays occur before the agency will pay the corresponding claim.

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

—the risk of nonpayment by a non-sovereign or private sector buyer or borrower in his home currency arising from default, insolvency, and/ or failure to take up goods that have been shipped according to the supply contract (compared with transfer risk arising from an inability to convert local currency into the currency in which the debt is denominated).

—a firm obligation to furnish resources of a specified amount under specified financial terms and conditions and for specified purposes for the benefit of a recipient country, expressed in an agreement or equivalent contract undertaken by the government or an official agency acting on its behalf. Usually includes principal and contractual interest payable by the importing country on disbursed and undisbursed credits. Commitments are defined as total payments obligations of the importing country, and not just the maximum liabilities of the agency. Thus, they should include, among other things, the percentage of loss that could be borne by the exporters/banks, nontransferable amounts, and adjustments for possible price increases where premiums have been paid. They include guaranteed and direct credits.

—see Appendix III.

—provision of export credit guarantee/insurance against risks of payments delays or nonpayments relating to export transactions. Cover is usually, though not always, provided both for commercial risk and for political risk. Cover can be provided from date of contract or date of shipment.

—the date before which loans must have been contracted in order for their debt service to be covered by a Paris Club rescheduling. Decisions about whether to include in an agreement debt service due under previous multilateral official reschedulings are made independently of whether those previous agreements were before or after the cutoff date.

—procedure by which overdue payments or future debt service obligations on an officially supported export credit are converted into a new “refinancing” loan extended by an institution other than the export credit agency. The refinancing loan can be extended either by a governmental institution or by a commercial bank, and in the latter case will carry the guarantee of the export credit agency.

—procedure by which overdue payments or future debt service obligations on an existing officially supported export credit are converted into a claim of the export credit agency on the debtor country carrying a revised stream of payments. Because of common usage, the term “rescheduling” may also refer in this paper to the general concept of 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.

—a measure of the concessionality of a loan. It is defined as the difference between the face value of the loan and the present value of the stream of repayments on that loan, expressed as a percentage of the face value.

—account or system under which an export credit agency extends cover to certain transactions that are not considered eligible for cover on the basis of the normal criteria of the agency, because of the size or risk of the transaction involved. Cover may be extended under government instructions when the transaction is considered beneficial to the national economy, would promote social and economic progress in the buyer country, or when there is a special interest of the government.

—a forum in which 22 OECD member countries participate in the Arrangement on Guidelines for Officially Supported Export Credits (the Consensus Arrangement). Aside from coordinating export credit terms, the OECD Export Credit Group has also served as a forum for exchange of information on debtor country situations and agencies’ practices; at the meetings of the Group the governmental authorities of the agencies are represented.

—amounts for which an export credit agency is committed to provide cover if the exporter succeeds in obtaining a contract. Mostly refers to medium-term business because most agencies do not make offers in respect of normal short-term business. Data are approximate, normally exclude interest, and will often overlap since more than one agency competes for the same project.

—loans or credits to finance the export of goods and services (and possibly some local costs) which are extended or guaranteed by an official export credit agency in the creditor country. For these export credits, the financing element—as opposed to the guarantee/insurance element—may derive from various sources. It can be extended by an exporter (suppliers’ credit) or through a commercial bank in the form of financial trade-related credit provided either to the supplier (also suppliers’ credit) or to the importer (buyers’ credit). It can also be extended directly by official institutions of the exporting countries, usually in the form of medium-term finance as a supplement to resources of the private sector, and generally for export promotion for capital equipment and large-scale, medium-term projects.

—forum in which creditor countries meet with the debtor to consider a request for the rescheduling of debt service payments on loans extended or guaranteed by their governments or official agencies. The Paris Club has neither a fixed membership nor an institutional structure and its meetings are open to all official creditors that accept its practices and procedures. During these meetings the participating creditors agree with the debtor country the broad terms of the rescheduling, which are set forth in an Agreed Minute and which the representatives agree to recommend to their respective governments.

—the proportion of any loss suffered by the exporter on which the agency will pay claims.

—the risk of borrower country government actions which prevent, or delay, the repayment of export credits. These actions assume that the importer has deposited on time the amounts due in local currency. Many export credit agencies also include under political risk such events as war, civil war, revolution, or other military civil disturbances which prevent the exporter from performing under the supply contract or the buyer from making payment. Some also include physical disasters such as cyclones, floods, or earthquakes.

—the period during which repayments under the financing are due to be made; this period usually starts after the end of performance under the commercial contract.

—payment guarantee required by export credit agencies for extending cover in certain markets, varying primarily with the legal and administrative setting within the borrowing country. It could consist of an irrevocable letter of credit, a confirmed irrevocable letter of credit, a government guarantee, or a central bank guarantee.

—commitments relating to sales of consumer goods and raw materials, which are usually covered under comprehensive/whole-turnover policies for which credit terms longer than six months are not normal. Because of the specific guarantee/ accounting system of some agencies, short-term commitments may include credits of up to two years in certain cases.

—a policy covering an individual export contract against failure to receive sums due from the overseas buyer.

—a financing arrangement under which the supplier (exporter) extends credit to the buyer in the importing country.

—insurance or guarantee cover for all or a negotiated portion of the export transactions of a supplier (exporter) or bank. These policies generally provide insurance at a lower premium rate than specific policies because the risks for the agency are spread across a broader range of transactions and frequently across several debtor countries.