SEYCHELLES Debt Treatment - April 16, 2009

1) Immediate Rescheduling and deferral of the arrears due as of 31 October 2008 inclusive and maturities due from 1 November 2008 to 30 June 2009.

2) First Reduction and Reorganization on the outstanding amounts as of 1 July 2009

3) Second Reduction on the remaining outstanding amounts as of 1 July 2010.

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) all Official Development Assistance loans;

(ii) amounts of outstanding credits, loans and consolidations on debts other than ODA loans, up to 20% of the amounts of outstanding credits after the implementation of the Second Reduction on 1st July 2010 or up to an amount of 5 million SDR, whichever is higher.

Participating creditor countries and the Republic of Seychelles will inform semi-annually the Secretariat of the Paris Club, who will inform other Creditors, of the debt swap agreements they have implemented. All elements necessary to evaluate the operation, its impact on the Republic of Seychelles’ economy and on the evolution of creditor’s 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 the Republic of Seychelles.

cancellation phasing

First Reduction and Reorganization:

- Cancellation of 22.5% of the outstanding amounts as of 1 July 2009, after implementation of the rescheduling - Entry into force on 17 July 2009

Second Reduction:

- Cancellation of 29.03% of the remaining outstanding amounts as of 1 July 2010, after implementation of the Firs Reduction and Reorganization - Entry into force on 23 July 2010

In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of the Republic of Seychelles commits to seek promptly from all its external commercial and bilateral creditors debt reduction and reorganization arrangements on terms comparable in net present value to those set forth in the Agreed Minutes dated 16 April 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 Republic of Seychelles commits to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 16 April 2009, commercial banks and bond holders - a treatment not more favourable than that accorded to the Participating Creditor Countries.

For the purpose of the comparison between the arrangements concluded by the Government of the Republic of Seychelles with its creditors not listed in the Agreed Minutes dated 16 April 2009 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 April 2009, the level of cash payments received by those creditors from the Government of the Republic of Seychelles as compared to their share in the Republic of Seychelles’ 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 the Republic of Seychelles and the creditors not listed in the Agreed Minutes dated 16 April 2009.

Participating creditors

Observers

Press release