Paris Club accepts Peru's offer to prepay $2 billion in debt

By Reshmi Basu

New York, June 16 - The Paris Club group of creditor countries said it has accepted a proposal by the Republic of Peru for an early payment of up to $2 billion on debt falling due between August 2005 and December 2009.

The prepayment will be made at par, according to the news statement. Participation is voluntary. However, the majority of Peru's creditors have indicated that they will take part.

Payments will be made on Aug. 15.

Interest savings from the prepayment will support the country's "cautious and balanced debt management strategy," the Paris Club said.

Peru's debt, not including the prepayment, will be $4.2 billion as of July 1. This does not include debt covered under Official Development Assistance conditions.

Formed in 1956, The Paris Club is an informal group of creditor governments from major industrialized countries.

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