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Glossary

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(i) Credits granted by a bank or a supplier to a debtor country for importing goods and services. When these credits are guaranteed by an appropriate institution of a Paris Club creditor, they are included in the claims treated in the context of the Paris Club. (ii) Non-ODA credits are sometimes referred to as commercial credits.

Commercial credits

In the context of the Heavily Indebted Poor Countries Initiative (HIPC initiative), the international financial community commits to provide sufficient assistance for the country to achieve debt sustainability at a set date called "completion point". The timing of completion point, a decision of the Executive Boards of the IMF and World Bank, depends on the satisfactory implementation of key structural reforms agreed to at the decision point, the maintenance of macroeconomic stability, and the adoption and implementation of a Poverty Reduction Strategy Paper for at least one year.

Completion point

Concessionality can occur either through a cancellation of part of the claims, or through a rescheduling of the claims over a long period of time with an interest rate that is lower than the appropriate market rate. When a debt treatment results in a reduction of the net present value of the claims rescheduled, it includes concessionality.

Concessional Treatment, Concessionality

Change of the terms of debt payment obligations. This can be implemented either through a change of the terms of the existing debt ("rescheduling"), or through the exchange of the debt for a new instrument (notably, through "refinancing").

Consolidation

Sum of futures maturities of principal.

CRD (Capital remaining due)

When a debtor country first meets with Paris Club creditors, a "cut-off date" is defined. Credits granted after this cut-off date generally are not subject to future rescheduling. The cut-off date is designed to protect credits granted by Paris Club creditors after a rescheduling. The cut-off date therefore helps restore access to credit for debtor countries facing a liquidity crisis.

Cut-off date

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