Newsroom: Article

Emerging Market De(bt)velopments

The Heavily Indebted Poor Countries Initiative (HIPC) entails coordinated action by the international financial community to reduce to sustainable levels the external debt burden of 41 countries.
On 23 and 24 January 2008, Paris Club creditors agreed to a reduction of external debts of Guinea and Gambia in line with this HIPC programme.
The agreement between the Paris Club creditors and the Government of the Republic of Guinea has been concluded under the so-called ‘Cologne terms’. The original debt was about $140m with contractual and past due interest amounting to about $160m. Of this amount $180m was immediately cancelled and $120m was rescheduled.
Next to that, as Guinea has very limited capacity to pay any external debts, the Paris Club creditors also agreed to defer until 2010 the repayment of arrears accumulated by Guinea on short-term and post-cutoff date debts, as well as on part of the maturities falling due during the consolidation period under the post-cut-off date debts.
In a similar way the Paris Club creditors have agreed on a restructuring of the external debts of the West African state of Gambia. Of a total debt of around $40m, about $12m was cancelled and the remaining $28m was restructured.

We advise holders of Guinean and/or Gambian debts to contact us for advice on any questions relating to (potential) defaults or the possibility of trading out of risk positions.

A. Thiescheffer on thiescheffer@omnibridgeway.com
R. van Hulst on vanhulst@omnibridgeway.com
H. Rijkens on rijkens@omnibridgeway.com

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