This report is not to be published nor may it be quoted as representing the Bank's views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Transcription

1 - - -~ '~. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ",\ ; J,',,-... 1,.,., I J _.'-:, I This report is not to be published nor may it be quoted as representing the Bank's views. No. E-224 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Economic Department THE EXTERNAL DEBT OF NICARAGUA June 16, 1952 Prepared by: Andrew C. Huang Reviewed by: Carel debeaufort

2 Table of Contents I Page I. Debt outstanding II. Service Payments III. Pledges of Revenues Table A-I: Nicaragua: External Public Debt Table A-2: ~Jicaragua: Estimated Contractual Interest and,l\.mortization Payments on the External Public Debt Note: This report was prepared by.andrew C. Huang and reviewed by Carel debeaufort.

3 THE EXTImIJAL DEBT OF IrrCAPJ.\GUA I. Debt Outstanding 1. As of December 31, 1951, the external public debt outstanding of Nicaragua ar.jounted to the equivalent of ~j8.4 million including the undisbursed portion of IBRD and Eximbank loans of about :':;5.7 million. The indebtedness consisted of the following: External Debt of Nicaragua 1/ (in millions of U.S.$) - A) U.S. dollar debt Bank of America loan IBRD loans Eximbank loans B) Sterling debt Bonds Sub-total Grand total / 1.21/ Tne Bank of America loan contracted in 1947 in the original amount of $4.5 million, for exchange reserve improvement, is reported to have been entirely repaid on April 25, Indebtedness to the IBRD totalling about $5.3 million consists of (a) the 4-1/8% ~~3. 5 million highway construction loan, (b) the 4-3/8% 0550,000 loan for crain storage construction and (c) the 4% ~1.2 ~~llion agricultural machinery loan. 1..s of April 30, 1952 about ~1.2 million of the total was disbursed. These loans,viii be amortized during the period The $2 million 1941 Eximbank loan for highway construction is repayable betvreen December 1950 and June The $600, power generator loan is repayable between May 1953 and May Interest for both loans is 4% p.a. 5. The 1909 sterling loan was obtained in the original amount of br.25 million for railway financing and funding of earlier 108.ns. After a technical interruption during service was reslliled in 1950 in accordance with the 1937 DOOt t'l.greement. 2/ y 2/ 3/ TI/ Y See Table A-I for details. The debt does not include a U.S. lend-lease credit of about $516,000 repayable in local currency. Of which ~~5. 2 million was undisbursed. Of which $0.5 million was undisbursed. Of which $5.7 million was undisbursed. For details of the 1937 Agreement see The Council of the Corporation of Foreign Bondholders, London, Annual Report for 1945.

4 - 2 - II. Service Payments 6. Annual service payments II (mainly in dollars) fluctuate irregularly until 1962 when all debt will be paid off. Payments will be in thousands of U.S. dollars: , , ,236 1,544 1, Table A-2 contains the details of these payments by debt category and currency. III. Pledges of Revenu~ 7. The sterling loan remained secured as a first charge on the customs revenues under the 1937 Agreement. 2/ In case of default the bondholders would be entitled to the original status Under the 1909 General Bonds. 1I This does not include service payments on au.s. lend lease credit of $516,000 repayable in local currency. 31 For details of the 1937 Agreement see The Council of the Corporation of Foreign Bondholders, London, Annual Report for About $300,000 is being held vflth the customs for the service of the 1909 loan. II For details of the 1909 General Bonds see The Council of the Corporation of Foreign Bondholders, London, Ar~ua1 Report

5 Table A-l; NICARAGUA: EXTERl,I1AL PUBLIC DEBT National and sovernment guaranteed debt Identification (In thousands) U" S. DOLLARS DEBT Bank of America loan to National ~ank of Nicaragua 3 1/2:%, ' Loans from international organizations I.B.R.D. loan to Republic of Nicaragua 4 1/8% I.E.R.!). loan to Republic of Nicaragua 4 3/8%, I.B.R.D.loan to Banco lifacional de Nica.ra.gua. 4%, Total loans from international organizations u.s. Government loans Export-Import Bank loan to Republic of lucaragua. 4%, Export-Import Bank loan to Empresa de Luz y Puerza. Electrica. S.A. 4% i/ Total U.S. Government loans Total U.S. dollar debt Page 1 Debt outstanding Deqember In currency Expressed in of pa.yment U.S. dollars $ $3.500 y $ 550 II $1.200!±I ~2125.9, $ 627 $ 600;d $1,22Z ~:7t276...:m1l ),500 Y 550 JJ 1,200!:J:} j} 1,221 &J ST.EBLUTG DEBT Sterling securities The Ethel'burga loan 4% (formerly 6%), , 2:25 TOTAL EXTilRl~AL Pu.!:iLIC DEBT Debt Summa~ Bl Curfencz (Amounts expressed in U.S. dollars) Currency U.s. dollars Disbursed and still outstanding Undisbursed Total Pounds sterling All currencies Exchange rate; 1 = $2.80. Amount I'. " 1,,566 5, , t2. 2. Percent J 100tOO

6 T~ble A-l: NIOARAGUA: EXTERNAL PUBLIC DEBT Page 2 11 This loan was guaranteed by the Republic of llicara.gu.a and by the Mortgage 13an...lt of Hicaragua. A prepayment of $1,000,000 "ras made on Hovember 30, 19.51, and the l.b.r.d. has been informed that the entire amount of the balance outstanding was repaid on April 25, Y Of this amount $61,856 had been disbursed, and $3.438,144 was still undisbursed as of Deeember 31, JJ This loan was not yet effective on December 31, 1951, ~ All undisbursed as of December 31, This loan is unconditionally guaranteed by the Republic of Nicaragua.. Of this amount, $ had been disbursed and $522,500 was still undisbursed as of December 31, J This does not include a Lend-lease credit payable in local currency. In a message to the Congress of Nicaragua on April 19, 1952, President Somoza of Nlcaragua:8tated that this credit was originally for the equivalent of $516,000. He said t~t it 1s to be paid by one installment of the equivalent of $114,200 and quarterly installments of the equ!va!ent of $33,438.:;4 sufficient to retire the loan in October ~e interest rate was not mentioned. IERn - STATISTICS SECTION June.5, 19.52

7 Table A-2: NICARAGUA: ESTIMATED CONTRACTUAL InTEREST AND AlvIORTIZATlON PAYMENTS Oli TEE EXTERNAL PUBLIC DEBT National and government guaranteed debt (Expressed in thousands of U.S. dollars) page 1 Bapk of~merica loan I.B.R.D. loans U.S. Government loans 2/ Debt out- payments dur1ng lear Debt out-. payments during year Debt out- Payments during year Year standing Amortl... Interest Total standing Amortl- Interest Total standing Amortl- Interest Total JanuarL:L...zat1on ~. January 1 zation January 1 zation l/ , , , 't ~ , ~ , () See footnotes on page 2.

8 Table A-2: NICARAGUA: ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMENTS ON THE EXTERNAL PUBLIC DEBT (Cont' d) National and government guaranteed debt (Expressed in thousand~ of U.S. dollars) Page 2 Year Total U.S. do1la.r debt Sterling securities 3/ Total debt zl Service payments Debt out- Pe;}1JIlents during year Debt out- Payments during year Debt out~ Payments during year by currenc.y standing Amorti- In- Total standing Amorti- In- Total standing Amorti- In- Total U.S. Pounds January 1 zation terest January 1 zatlon terest January 1 zation terest dollars sterl~ng '~276 1, , ~989 1, ~628 1, , , , , ' , ;264 1, , , , ,236 1, , ,298 1, ,544 1, , ,126 2,, ' , ~ , ';',770 1, The I.B.R.D. has been informed that this loan was entirely repaid on April / This does not include a Len~lease credit payable in local currency. See footnote 6 on Table A-I. J/ It was assumed that this security would be retired by purchase in the open market at an average price of 80. IBRD - STATISTICS SECTION June