[Umbrella] China Eximbank reschedules 3 loans for East Coast Housing Project and Les Mamelles Housing Project (Linked to Project ID#55557, ID#67500, ID#67504)

Following an acute balance of payment crisis in 2008, the Republic of Seychelles put in place a comprehensive debt restructuring program to reduce sovereign debt as a percentage of GDP to 50% by 2020. Part of this program involved an agreement in April 2009 with the Paris Club to restructure $160 million in bilateral debt. Paris Club creditors agreed to a nominal debt stock cancellation of 45%, with the remaining amounts rescheduled over 18 years, including a 5-year grace period. The restructuring agreement with the Paris Club also called upon Seychelles to restructure its outstanding obligations to other bilateral creditors and private creditors (who accounted for the majority of external debt). One of these creditors was China Eximbank. At the time, the Republic of Seychelles had three outstanding debt obligations to China Eximbank. On August 4, 1997, China Eximbank and the Government of Seychelles signed an RMB 50,000,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO.8 (97) 1997] for Phase 2 of the East Coast Housing Project. This loan carried the following terms: 4% interest rate, 8-year maturity, and 3-year grace period. Then, on August 20, 1998, China Eximbank and the Government of Seychelles signed an RMB 87,980,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO.13 (38) 1998] for Phase 1 of the Les Mamelles Housing Project. This loan carried the following terms: 4% interest rate, 8-year maturity, and a 4-year grace period. Then, on January 8, 2005, China Eximbank and the Government of Seychelles signed an RMB 8,305,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL (2004) 11 (121)] for Phase 1 of Les Mamelles Housing Project. This loan carried the following terms: 2% interest rate, 10-year maturity, and 4-year grace period. On April 18, 2011, China Eximbank and the Republic of Seychelles agreed to reschedule all three of these loans. The parties agreed that the outstanding balance of the loan for Phase 2 of East Coast Housing Project would be repaid according to the following repayment terms: 30.5-year maturity (367 months), 20.5-year grace period (247 months), and a 2% interest rate. The parties agreed that the outstanding balance of the loan (RMB 87,891,876.33) for Phase 1 of the Les Mamelles Housing Project would be repaid according to the following repayment terms: 30.5-year maturity (367 months), 20.5-year grace period (247 months), and a 2% interest rate. The parties also agreed that the outstanding balance of the additional loan (RMB 8,213,615) for Phase 1 of the Les Mamelles Housing Project would be repaid according to the following repayment terms: 24.75-year maturity (297 months), 14.75-year grace period (177 months), and a 2% interest rate. The 2011 rescheduling of the loan for the Phase 2 of the East Coast Housing Project is captured in Project ID#67504. The 2011 rescheduling of the loan for the Phase 1 of the Les Mamelles Housing Project is captured in Project ID#67500. The 2011 rescheduling of the additional loan for the Phase 1 of the Les Mamelles Housing Project is captured in Project ID#55557. According to the Government of Seychelles, in the run-up to the final debt rescheduling deal that was struck on April 18, 2011, it made several proposals to China Eximbank that were not accepted. In December 2010, it proposed that China Eximbank spread its repayments over a 50 year period at an interest rate of 2.5%. Then, on March 24, 2011, it proposed a 20 year repayment period, 10 year grace period, and 1% interest rate. The Ministry of Finance of Seychelles claims that the second proposal was ‘in line with the Paris Club comparable debt treatment that Seychelles is obliged to seek for all restructuring of its debts’.

Number of official sources

5

Number of unofficial sources

5