THE PARIS CLUB GLOSSARY
Official-Development loans; subject to rescheduling are commercial as
well as ODA-Loans; ODA-Loans are repayable over 20 years with 10 years
of grace (lower-middle-income countries) or over 30 years with 12 years
of grace (low-income countries); the moratorium interest rate is fixed
on the basis of the concessional rate related to the original loan agreement.
Debts contracted after the cut-off date are not subject to rescheduling
and have to be paid at due date; creditors occasionally agree to postpone
the clearance of post-cut-off-date arrears or of the payment of post-cut-off-date
maturities if the debt service capacity prevents the debtor from making
the corresponding payments.
Debts contracted before the cut-off date and hence subject to rescheduling.
(see "cut-off date)
"Previously Rescheduled Debt" or payment obligations relating to bilateral
agreements concluded for the implementation of previous Agreed Minutes;
in response to the deterioration of the balance of payments of an increasing
number of debtors, Paris-Club creditors are, in general, agreeable to
include PRD in the scope of the rescheduling.
Debts owed by private sector debtors are reschedulable only to the extent
to which the counterpart in local currency of the amount owed has been
deposited at the Central Bank of the debtor country or at other banks
authorised for foreign exchange transactions; the government of the
debtor country is responsible to the creditor if it fails to transfer
the amounts deposited due to lack of foreign exchange; in countries
where private debtors have unrestricted access to foreign exchange,
the scope of the rescheduling is generally limited to debts owed by
public sector debtors.
Public sector debtors are generally the government of the debtor country
including agencies and institutions the status of state-owned-enterprises
is ambiguous; some debtors accept responsibility for the debts of enterprises
in which the government has a majority participation (Mexico); others
decline any responsibility for such debts and classify them as private
sector debts (Brazil).
Clause in the Agreed Minute declaring the rescheduling as null and void
if the debtor fails to meet certain specified conditions, such as making
an overdue non-consolidated payment or completing reviews under IMF-arrangements.
Inclusion of debt service obligations arising from a previous rescheduling
agreement in the scope of an Agreed Minute consolidating maturity-falling
due after the expiration of the consolidation period under such an agreement.
Rights Accumulation Programme (RAP)
Arrangement in the upper credit tranches in support of a debtor's macroeconomic
adjustment programme; under a RAP, the debtor is not entitled to the
use of IMF-resources as long as payment arrears to the IMF are unsettled;
drawing rights acquired are offset against outstanding arrears; Paris-Club
creditors generally agree to accept RAP's as the basis for providing
debt relief. (see "IMF-conditionality")
Period during which rescheduled amounts due are to be repaid; the repayment
period for middle-income countries is 10 years with a four to six year
grace period, 15 years for lower-middle income countries with eight
years of grace, 23 years for low-income countries with either six years
of grace (option: debt reduction) or no grace period (option: debt service
Permitting the debtor to effect payment at a date subsequent to the
maturity date provided for in the supplier or buyer contract; in technical
terms, creditors signatories to an Agreed Minute either:
-refinance the debts rescheduled by placing at the disposal of the debtor
new funds according to existing payment schedules; these funds are to
be repaid according to the repayment terms set out in the Agreed Minute
- reschedule the corresponding amounts.