Features of Debt Conversion Schemes
|Original creditor only||X4|
|Eligible external debt|
|Exchange rate for conversion|
|Official exchange rate||X||X||X||X||X||X|
|Parallel exchange rates||X7||X7|
|Valuation of debt for conversion|
|Below face value||X9||X10||X||X||X11|
|Eligible domestic investments|
|Original obligor only||X12|
|Repayment of domestic obligations||X||X||X|
|Restrictions on eligible investments|
|Restrictions on capital repatriations||X||X13||X||X||X||X||X||X|
|Restrictions on profit remittances|
|Same as for all foreign investment||X|
|More restrictive than the above||X||X||X||X||X||X||X|
|Limit on value of conversions||X||X||X|
|Auction of conversion rights||X14|
|Additional foreign exchange required||X||X||X15||X|
Compendium of Rules on International Exchange, Chapters XIX and XVIII.
Introduced in February 1987 and temporarily suspended in August 1987.
Mexico has temporarily suspended receiving applications under the scheme in October 1987.
Before June 1984, any nonresident could participate.
Rescheduled debt only.
Rescheduled debt and debt that falls due on or after January 1, 1987.
Free market exchange rate.
Debt redeemed at face value, but conversion fees apply.
Discount, if any, determined by an auction.
Conversions of public sector debt are subject to a small discount; conversion terms of private sector debt are negotiable.
Discount, if any, determined by newly formed commission with oversight responsibility.
Private sector debt only.
Since March 1987, investment through debt conversion must remain at least 12 years in Brazil before becoming eligible for repatriation.
Chapter XVIII investments only.
Investments in the nonpriority sectors only.
Introduced December 1982; eliminated June 1984.