China Eximbank forgives $18.4 million debt of Government of Serbia (Linked to Project ID #67023)

On December 23, 1999, China Eximbank signed a general loan agreement with a Yugoslavian state-owned bank called Beogradska bank a.d., Beograd. The Federal Republic of Yugoslavia (FRY) issued a sovereign guarantee for this loan. A set of subsidiary loan agreements [no. 99012D, 99012F and 99012G] were subsequently issued to two state-owned power companies: Public Enterprise, Electric Power Industry of Serbia (“JP EPS”) and Public Enterprise “Elektromreza Srbije” (“JP EMS”). Then, Beogradska bank a.d. Beograd went into bankruptcy in early 2002 and the FRY dissolved in 2003. On February 20, 2009, the Government of the Republic of Serbia signed a Debt Restructuring Agreement with China Eximbank. In its capacity as guarantor, the Government of the Republic of Serbia assumed responsibility for an outstanding debt obligation to China Eximbank worth $46,296,184. Under the terms of this agreement, 40% of the outstanding debt (approximately $18,495,448) was written off by China Eximbank. The remaining 60% of the outstanding debt was rescheduled. The value of the rescheduled debt obligation (60% of the total value of the sum of unpaid principal, accrued but unpaid interest, and accrued penalty interest aggregated in the period ended 25 March 2009) was $27,770,943.88. The new interest rate that was contractually agreed upon by the parties was a 6-month LIBOR plus a 1.3% margin. The parties also agreed that the loan principal would be repaid in 22 semi-annual installments (on January 21 and July 21), with a grace period of one year starting from the effectiveness date of the loan. In the event of delays in settling liabilities matured, a penalty interest rate of 1% above the regular interest would apply. Project ID #85131 captures the debt forgiveness that was granted to the Government of the Republic of Serbia and Project ID #67023 captures the rescheduling of the outstanding obligations of the Government of the Republic of Serbia.

Additional details

The average 6 month LIBOR rate in February 2009 was 1.757%, so AidData has coded the all-in interest rate as 1.757% + 1.3% = 3.057%.

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