Paris Club lenders to cancel 45% of Republic of Seychelles' debt

By Jennifer Chiou

New York, April 16 - Paris Club said it reached an agreement with the government of the Republic of Seychelles to cancel 45% of the republic's debt during meetings on Wednesday and Thursday.

The 45%, in nominal terms, delivers a 50% cancellation in net present value terms with a discount rate equal to the six-month CIRR average for the consolidated debt at the time of the negotiation.

Seychelles' public debt was estimated to be $760 million as of the end of 2008 while the debt owed to creditor countries participating in this agreement was estimated to be $163 million at the same date.

The delegation of the Republic of Seychelles described the challenging economic and financial situation faced by its country and presented the main measures for recovery included in the program of the government, Paris Club said, adding that its members took note of the strong commitment of the government to implement the economic reforms under this program and reaffirmed their support.

According to a Paris Club release, the remaining amounts owed will be rescheduled over 18 years, including a five-year grace period. Members also agreed to defer part of payments due in the coming years.

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

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