COMOROS Debt Treatment - November 19, 2009

• repayment of non ODA credits over 23 years , with 6 years of grace
• repayment of ODA credits over 40 years with 16 years of grace

On an exceptional basis, considering the Union of the Comoros' limited capacity of payment, further constrained by a harsh global economic context, creditors agreed to defer senior debt (not usually treated by the Paris Club), so that the overall payments expected from the Union of the Comoros between 1 July 2009 and 30 June 2012 will be reduced by around 80%.

Creditors agreed on a further reduction of 50% of the debt service of the Union of the Comoros should the country reach its decision point under the HIPC initiative.

possibility to conduct debt swaps

On a voluntary and bilateral basis, the Government of each Participating Creditor Country or its appropriate institutions may sell or exchange, in the framework of debt for nature, debt for aid, debt for equity swaps or other local currency debt swaps:

(i) the amounts of outstanding loans as regards ODA loans;

(ii) the amounts of other outstanding credits, loans and consolidations, up to 20% of the amounts of outstanding credits as of 30 June 2009 or up to an amount of 30 million SDR, whichever is higher.

good will clause

Participating Creditor Countries agree to grant a topping-up of the debt reduction of the Agreed Minutes dated 19 November 2009 to Cologne terms once the Government of the Union of the Comoros reaches its Decision Point under the Enhanced Debt Initiative for the Heavily Indebted Poor Countries, provided that the Government of the Union of the Comoros maintains satisfactory relations with the Participating Creditor Countries and the IMF.

Phases

• First phase : From July 01, 2009 up to June 30, 2010 implemented at the signature of the agreement
• Second phase : From July 01, 2010 up to June 30, 2011 implemented at March 21, 2011
• Third phase : From July 01, 2011 up to June 30, 2012 not implemented yet

In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of the Union of the Comoros commits to seek from all its external creditors debt reduction and reorganisation arrangements on terms comparable in net present value to those set forth in the Agreed Minutes dated 19 November 2009 for credits of comparable maturity. Comparability of treatment for debt reduction in net present value is assessed not only on the basis of the reduction in the face value of the debt but also on the terms of repayment of the debts not cancelled.

Consequently, the Government of the Union of the Comoros commits to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 19 November 2009, commercial banks and suppliers- a treatment not more favorable than that accorded to the Participating Creditor Countries.

For the purpose of the comparison between the arrangements concluded by the Government of the Union of the Comoros with its creditors not listed in the Agreed Minutes dated 19 November 2009 on the one hand, and arrangements with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the exposure of the creditors not listed in the Agreed Minutes dated 19 November 2009, the level of cash payments received by those creditors from the Government of the Union of the Comoros as compared to their share in the Union of the Comoros’ external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganised claims and in particular their repayment terms whatever forms they take, and in general the financial relations between the Government of the Union of the Comoros and the creditors not listed in the Agreed Minutes dated 19 November 2009.

Participating creditors

Observers

Press release