Dominican Republic reaches agreement with Paris Club on debt rescheduling

New York, April 19 - The Paris Club said it reached an agreement with the government of the Dominican Republic to restructure $155 million of debt maturing from Jan. 1, 2004 to Dec. 31, 2004 and $38 million of arrears.

Payments due to Paris Club creditors in 2004 will be cut to $293 million from $479 million.

"This consolidation is expected to make an important positive contribution to the Dominican Republic's economic outlook and to strengthen its external position," the Paris Club said in a news release.

The creditors added that they took note of economic and financial measures already undertaken by the Dominican Republic and stressed the importance they attach to the continued and full implementation of this program.

Under the rescheduling, the Dominican Republic will receive a grace period of five years and then repay the debt over the following seven years.

Official Development Assistance loans will be rescheduled at a rate not higher than the original loan.

Other loans will be rescheduled at a market interest rate of the risk-free rate for the currency involved.

Creditors may also voluntarily exchange debt for nature, debt for aid, debt for equity or carry out other debt swaps.

The Dominican Republic agreed to seek comparable treatment from non-Paris Club bilateral and private creditors, the Paris Club said.

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