DJIBOUTI Debt Treatment - October 16, 2008

• repayment of non ODA credits over 15 years , with 8 years of grace
• repayment of ODA credits over 20 years with 10 years of grace

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 all ODA loans.

Participating creditor countries and the Government of Djibouti will inform semi-annually the Secretariat of the Paris Club, who will inform other creditors, of the debt swaps agreements they have implemented. All elements necessary to evaluate the operation, its impact on Djibouti’s economy and on the evolution of creditors’ exposure will be transmitted to the Secretariat including: its nature and purpose; the parties to the debt swap; the amount, type and value of the debt treated; the price of sale to investors and the expense of Djibouti.

good will clause

Paris Club Creditors agreed in principle to meet in order to examine the situation of Djibouti's debt under the Evian Approach at the end of the Agreement. They will assess the sustainability of Djibouti’s debt and Djibouti’s commitment to policies that will secure an exit from the Paris Club and to implementing a comparable treatment from its other external creditors.

Based on that assessment and if Djibouti fulfils the criteria here above mentioned and provided that Djibouti has established a satisfactory track-record under the Agreed Minutes, made all payments on due date, and concluded a follow-up IMF programme, Paris Club creditors expressed their willingness to consider a debt treatment under the Evian Approach on terms tailored to Djibouti's debt situation.

Phases

• First phase : From September 01, 2008 up to August 31, 2009 implemented at the signature of the agreement
• Second phase : From September 01, 2009 up to August 31, 2010 not implemented yet
• Third phase : From September 01, 2010 up to August 31, 2011 not implemented yet

In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of Djibouti commits to seek promptly from all its external creditors debt reorganisation arrangements on terms comparable to those set forth in the Agreed Minutes dated 16 October 2008, while trying to avoid discrimination among different categories of creditors.

Consequently, the Government of Djibouti commits to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 16 October 2008, and private creditors- a treatment not more favourable than that accorded to the Participating Creditor Countries for credits of comparable maturity.

For the purpose of the comparison between the arrangements concluded by the Government of Djibouti with its creditors not listed in the Agreed Minutes dated 16 October 2008 on the one hand, and with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the real exposure of the creditors not listed in the Agreed Minutes dated 16 October 2008 , the level of cash payments received by those creditors from the Government of Djibouti as compared to their share in Djibouti‘s external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganized claims and in particular their repayment terms whatever forms they take and in general the financial relations between the Government of Djibouti and the creditors not listed in the Agreed Minutes dated 16 October 2008.

Participating creditors

Observers

Press release