External public debt of Uruguay

EC - 24 FILE COPY CONFIDENTIAL This report is limited to those members of the staff to whose work it directly relates. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT EXTERNAL PUBLIC DEBT OF URUGUAY November 24, 1953 Economic Staff Prepared by: James J. Lynch Reviewed by: Carel deBeaufort Table of Contents Page I. Outstanding External Public Debt 1 II. Status of Service of Public Issues 2 a) Historical b) Current service payments Table A-1: Fxternal Public Debt A-2: Estimated Contractual Interest and Amortization Payments on the External Public Debt EXTERNAL PUBLIC DEBT OF URUGUAY I. Outstanding External Public Debt 1. As of December 31, 1952, the external public debt of Uruguay was esti- mated to amount to the equivalent of US?131.5 million, composed as follows. Debt outstdg. Dec.31/52 In currency Expressed of payment in U.S.$ (in thousands) U.S. DOLLAR DEBT Securities $41,857 41,857 IBRD loan $32,859 32,859 U.S. Government loans $14,701 14,701 Total U.S. dollar debt . . . . . . . . . . 9,T!7 STERLING DEBT Securities U14,995 41,985 IBRD loan 1; 50 141 Total sterling debt . . . . . . . . . . . 15,045 42,1l SWISS FRANC DEBT IBRD loan 1/ 1/ Total external public debt ............................. 131,543 2. The U.S. dollar debt amounting to $89.4 million is equivalent to 68% of the total debt. Of this group $63.3 million was disbursed and outstanding and $26.1 million was undisbursed as of December 31, 1952. The dollar debt consists of three major items: (1) dollar bonds issued in the United States during the twenties and later refunded under the debt adjustment plan of 1937. These bonds are now outstanding in the amount of $1.9 million, (2) the dollar portion amounting to $32.8 million of an IBRD loan totalling $33 million and (3) U.S. Government loans amounting to $14.7 million. These loans consist of (a) the re- maining portionsamounting to A13.9 million ofthe$17.2 million Export-Import Bank loansand (b) a 31% Maritime Administration loan which was used to finance the purchase of ships. The balance due on this loan is $796 thousand. 3. The remainder of the debt is practically all accounted for by long- term old sterling bonds now outstanding in the amount of hl5 million, equivalent to US$42.1 million or 32% of the total debt. 1 See Footnote 6 of Table A-1. - 2- II. Status of Service of Public Issues a) Historical 4. All interest payments on the publicly-issued external debts of Uruguay were met consistently from 1891 through 1932. Sinking fund payments were partly suspended during liorld Viar I and again in 1923 and 1924. The world crisis of the early 1930's was the cause of another suspension of sinking fund payments from January 1932 and July 1933. From this latter date interest on the external debt was made payable only in pesos, the peso equivalent being computed at par of ex- change. 5. In 1937 Uruguay recognizing the advisability of placing its financial house in order offered the bondholders an adjustment plan. The plan consisted of an exchange of old dollar bonds on a par for par basis for new dollar bonds and a reduction of interest from 5%, 6%, 7% and 8% to 31%, 4 1/8%, 4 5/16% and 41g% respectively. 6. The offer made in agreement with .the Council of the Corporation of Foreign Bondholders on sterling bonds called for a reduction of interest from 5% to 3-% and an extension of maturities. Practically all bonds have been assented to these adjustment plans. b) Current service payments 7. Service payments on the total external public debt of $131.5 million are estimated to amount to US$8.5 million during 1953. Half of this amount is required for amortization and the other half for interest payments. The amount payable in dollars is estimated at $5.8 million and the one payable in sterling at the equivalent of $2.7 million. Service payments are estimated to rise to US9.4 million in 1954 and to US$11 million in 1955. Payments move gradually d'ownward from that level until 1974 when it is estimated that a final payment of $1.7 million is required. The estimate is based on the assumption that the Sink- ing Funds will purchase bonds in the market at prices varying from 75% to 100% for the dollar bonds and 50% to 100% for the sterling bonds. Listed on the follow- ing page are the service charges in each of the years 1953-1974. Additional details are contained in Table A-2. - 3 - Estimated contractual interest and amortization payments on the external public debt of Uruguay (in thousands of US$) T o t a 1 Service pay'ts Debt out- Payments during year by currency standing Amorti- L Year Jan.1 zation Interest Total U.S.$ Sterl. 1953 131,543 4,218 4,25n 8,468 5,802 2,666 1954 126,201 4,466 4,969 9,435 6,769 2,666 1955 120,54o 6,266 4,730 10,996 8,323 2,673 1956 113,002 6,o5 .,437 1o,482 7,809 2,673 1957 105,605 5,861 ,151 10,012 7,340 2,672 1958 98,306 6,013 3,865 9,878 7,206 2,672 1959 90,763 6,037 3,574 9,611 6,947 2,664 1960 83,094 6,134 3,279 9,413 6,832 2,581 1961 75,228 6,337 2,972 9,309 6,728 2,581 1962 67,046 6,548 2,657 9,205 6,624 2,581 1963 58,535 6,629 2,326 8,955 6,520 2,435 1964 49,916 6,46 1,993 8,457 6,417 2,040 1965 41,597 6,684 1,668 8,352 6,312 2,040 1966 32,933 5,533 1,338 6,871 5,355 1,516 1967 25,814 4,457 1,061 5,518 5,273 245 1968 20,943 4,513 855 5,368 5,124 244 1969 16,017 4,530 651 5,181 4,937 2k 1970 11,074 3,409 446 3,855 3,612 243 1971 7,452 2,144 297 2,441 2,271 170 1972 5,27k 1,829 205 2,03k 1,950 84 1973 3,445 1,760 127 1,887 1,880 7 1974 1,685 1,685 53 1,738 1,731 7 Since it is estimated that $20.5 million of the external bonds is held by various Uruguayan State agencies, net payments abroad will be somewhat lower than shown in the above table. Table A-1: URUGUAY - EXTZRNAL PUBLIC DEBT National and Government Guaranteed Debt (In thousands) Pa,e 1 Debt outstanding Identification December 31, 1952 In currency Zxpressed in of payment 11 U.S. dollars TOTAL ZXTJRITAL PUBLIC DEBT 131,543 U.S. DOLLAR DEBT j89,417 89,417 Securities 2/ $41,857 41,857 $1,248,000 3 Uruguay Ext. Readj. 3 1/2e, 1937-1984 $ 691 691 $6,860,500 31 Uruguay Ext. Readj. 4 1 2%, 1937-1978 $ 4,488 4,488 $44,839,000 S Uruguay Ext. Readj.4 1/8%, 1937-1979 $30,824 30,824 $2,855,400.f Uruguay Ext. Cony. 4 5/16%, 1937-1978 $ 1,909 1,909 $2,008,100 3/ Uruguay Ext. Cony. 4 1/8%, 1937-1979 $ 1,372 1,372 z605,000 Uruguay 3 1/4, 1919-1978 A/ $ 1,706 1,706 Unassented bonds 3/ $1,505,000 Uruguay Ext. 5%, 1915-1952 $ 94 94 $7,500,000 Uruguay Ext. S. F. 8%, 1921-1946 $ 205 205 $30,000,000 Uruguay Ext. S. F. 61, 1926-1960 $ 300 300 $17,581,000 Uruguay Ext. S. F. 6%, 1930-1964 $ 268 268 IBRD loan $32,859 32,859 Portion of $33,000,000 loan to Administracion General de las Usinas Electricas y los Telegonos del Estado 4 1/40, 1950-1974 $32,859 .l 329839 U.S. Government loans $14,701 14,701 Export-Import Bank loans M.1?9 94 $12,000,000 Republic of Uruguay 4%, 1942-1965 $10,401 10,401 $2,295,000 Republic of Uruguay 4, 1943-1959 $ 1,089 1,089 $2,538,000 Republic of Uruguay 4, 1951-1956 $ 2,158 2] 2,158 $321,400 Republic of Uruguay L4, 1951-1956 $ 257 . 257 $1,856,000 Maritime Administration 3 1/2%, various maturities $ 796 796 0*00*** ... 1. STELING DEBT £15,045 42,126 Securities 8J 214,995 41,985 £20,500,000 Uruguay Cons. 3 1/25, 1891-1999 £11,066 30,985 E6.912,836 Uruguay Conv 3 1/2%, 1905-1979 3/ Z 2,513 7,o36 £1,276,672 Uruguay Public Works 3 1/2%, 1909-19799/ £ 610 1,708 £1,000,000 Uruguay 3 1/2 , 1914-1978 £ 613 1,716 11,276,595 city of Montevideo 3 1/2%, 1889-1961 10/ 8 193 540 IBED loan Z 50 141 Portion of $33,000,000 loan to Administracion General de las Usinas Electricas y los Telefonos del Estado 4 1/4%, 1950-1974 z 50 / 141 See footnotes at end of table. Table A-1 URUGUAY - EXTERNAL PUBLIC DiMT (Continued) National ,and Government Guaranteed Debt (In thousands) Page 2 Debt outstanding December 31 1952 Identification In currency Expressed in of piayment 1/. U.S. dollars SWISS FRAFO DEBT IBRD loan Portion of $33,000,000 loan to Administracion General de lae Usinas Electricas y los Telefonos del Estado 4 1/V,, 1950-1974 § Summar;Z by Currency (Amounts expressed in thousands of U.S. dollars) Amount% Total external public debt 131.543 100.00 U.S. dollar debt 89,417 67.98 Disbursed and still outstanding 63,329 '48.15 Undisbursed 26,088 .19.83 Sterling debt 42,126 32.02 Exchanpe rates: £1 = $2.80. 11 The amounts .outstanding of the securities were given by the Government of Uruguay in pesos. The amounts in currency of payment were calculated by the IRD by using the rates used by Uruguay, namely; U$1 = US$103.5197 and Ur4l :.0.212766. 2/ In 1937 Uruguay made a settlement offer to the holders of the defaulted dollar bonds of the Republic and the City of Montevideo. The following table summarizes what-a holder of a,$1,000 bond received under the plan: Old bonds Received under settlement $1,000 Uruguay,5%, 1915-1952 *$,000 Uruguay Ext. Readj, 3 112el, 1937-1984 $1,000 Uruguay 8p, 1921-1946 $1,000 Urupuay Ext. Readj. 4-4 1/ 4 1/2%.a/l 1937--.1978 $1,000 Uruuua 60i,t 1926,3-144-1860/ $1,000 Uruguay 6, 19261960 $uay 1937-1979 $1,000 Uruguay 0,. 1930-1964 $1,000 Uruguay Ext. Readj. 3 3/4-44 1/% .al, 1937-1979 $1,000 Montevideo 71,, 1922-1952 ($1,200 Uruguay Ext. Con . 3 7/8-4 1/8-4 5/160 ( 1937-1978 ($10 cash $1,000 Montevideo 6%, 1937-1979 ($1,100 Uruauay Ext. Con . 3 3/4-4-4 1/8%,-a/, 1937-1979 s87.50 Convertible Scrip cash Table A-1: 'URUGUAY - EXTMR1AL PUBLIC DEBT (Continued) Page 3 2/ (Continued) a/ -These bonds had a gradually increasing interest rate which reached the maximum rate in 1944. All new bonds issued under the settlement have cumulative sinking funds. 3/ The amount issued under the plan up to December 31, 1952 is not available, The amount shown here is the amount authorized, 19/ Payable in pounds sterling or U.S. dollars at Z1 = $4.86. fJ Moodyls Governments for 1953 reports that the following bonds were also out- standing and unassented: $58,500 Montevideo 7%, 1922-1952 $9)000 Montevideo 6%, 1926-1959 However, since it was impossible to ascertain whether these bonds were still outstanding on December 31, 1952, they were excluded. / The status of this loan on December 31, 1952 and February 28, 1953 was as follows: December 31, 1952 February 28, 1953 In currency Exoressed in In currency Expressed in of Rayment U.S. dollars of payment U.S. dollars Total loan 13;000,000 33,000,000 Disbursed and still outstanding 7,419,375 7,425,722 U.S. dollars $7,278,815 7,278,815 $ 7.278,815 7,278.815 Pounds sterling 5o,2OO 140,560 Z 50,200 140,560 Swiss francs - Sw fr 27,276 6,347 Undisbursed 25,580,625 25,574.278 Z/ Of this amount $507,620 was undisbursed. / In 1937 Uruguay made a settlement offer to the holders of the defaulted sterling bonds of the Republic and the City of Montevideo. Under this plan the interest rate, which had been 5Z on all sterling bonds except the 3 1/2% of 1891 was reduced to 3 1/2% and the maturities extended, as shown in this table. 3ach bondholder except holders of the 3 1/2% bonds of 1891 received a 5% cash bonus to be paid in five equal aiinual installments. All bonds were provided with a cumulative sinking fund. The former bonds of the City of Moatevido became the obligations of the Republic. .f Payable in pounds sterling, French francs or Uruguayan pesos at £20 = fr 3000 = U$94. 10/ Obliaation of the Republic. IBRD - STATISTICS SECTION May 21. 1953 Table A-2: URUGUAY - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION ?AYMENTS ON THE EXTERNAL PUBLIC DEBT (Expressed in thousands of U.S. dollars) Page 1 Total Service payments Total U.S, dollar debt Year Debt out- Payments during year by currency Debt out- Payments during year standing Amorti- -In" T ----- -U.S. Pounds standing Amorti- In- Total Jan. 1 zation terest otal dollars sterling Jan. 1 zation terest 1953 131,543 4,218 4,250 8,468 5,802 2,666 89,417 3,025 2,777 5,802 1954 126,201 4,466 4,969 9,435 6,769 2,666. 86,185 3,206 3,563 6,769 1955 120,540 6,266 4,730 10,996 8,323 2,673 82,761 4,918 3,405 8,323 1956 113,002 6,045 4,437 10,482 7,809 2,673 77,616 4,610 3,199 7,809 1957 105,605 5,861 4,151 10,012 7,340 2,672 72,768 4,336 3,004 7,340 1958 98,306 6,013 3,865 9,878 7,206 2,672 68,184 4,393 2,813 7,206 1959 90,763 6,037 3,574 9,611 6,947 2,664 63,529 4,325 2,622 6,947 1960 83,094 6,134 3,279 9,413 6,832 2,581 58,928 4,400 2,432 6,832 1961 75,228 6,337 2,972 9,309 6,728 2,581 54,241 4,491 2,237 6,728 1962 67,046 6,548 2,657 9,205 6,624 2,581 49,448 4,584 2,040 6,624 1963 58,535 6,629 2,326 8,955 6,520 2,435 44,548 4,684 1,836 6,520 1964 49,916 6,464 1,993 8,457 6,417 2,040 39,531 4,788 1,629 6,417- 1965 41,597 6,684 1,668 8,352 6,312 2,040 34,397 4,896 1,416 6,312 1966 32,933 5,533 1,338 6,871 5,355 1,516 29,137 4,151 1,204 5,355 1967 25,814 4,457 1,061 5,518 5,273 245 24,604 4,257 1,016 5,273 1968 20,943 4,513 855 5,368 5,124 244 19,950 4,304 820 5,124 1969 16,017 4,530 651 5,181 4,937 244 15,250 4,313 624 4,937 1970 11,074 3,409 446 3,855 3,612 243 10,543 3,184 428 3,612 1971 . 7,452 2,144 297 2,441 2,271 170 7,166 1,986 285 2,271 1972 5,274 1,829 205 2,034 1,950 84 5,180 1,749 201 1,950 1973 3,445 1,760 127 1,887 1,880 7 3,431 1,753 127 1,880 1974 1,685 1,685 53 1,738 1,731 7 1,678 1,678 53 1,731 Table A-2t URUGUAY - BSTIMATED CONTRACTUAL INTERST AND AMORTIZATION PAYMENTS ON TIE EXTERNAL PUBLIC DEBT - Contd. (Expressed in thousands of U.S. dollars) gage 2 U.S. dollar securities 1/ IBRD loan U.S. Government loans (U. S. dollar portion)9 Year Debt out- Payments during year Debt out- Paents during year Debt out- Payments during year standing Amorti- In- Total standing Amorti- In" Total standing Amorti- in- Total Jan. 1 sation terest Jan. 1 zation terest Jan. I sation terest 1953 41,857 1,369 1,732 3,101 32,859 - 495 495 14,701 1,656 550 2,206 1954 40,281 1,433 1,668 3,101 32,859 - 1,397 1,397 13,045 1,773 498 2,271 1955 38,631 1,502 1,599 3,101 32,859 1,643 1,379 3,022 11,271 1,773 427 2,200 1956 36,902 1,574 1,527 3,101 31,216 1,643 1,309 2,952 9,498 1,393 363 1,756 1957 35,090 1,648 1,453 3,101 29,573 1,643 1,239 2,882 8,105 1,045 312 1,357 1958 33,193 1,728 1,373 3,101 27,931 1,643 1,170 2j813 7,060 1,022 270 1,292 1959 31,203 1,810 1,291 3,101 26,288 1,643 1,100 2,743 6,038 872 231 1,103 1960 29,118 1,896 1,205 3,101 24,645 1,643 1,030 2,673 5,165 861 197 1,058 1961 26,935 1,987 1,114 3,101 23,002 1,643 960 2,603 4,304 861 163 1,024 1962 24,646 2,080 1,021 3,101 21,359 1,643 890 2,533 3,443 861 129 990 1963 22,250 2,180 921 3,101 19,716 1,643 820 2,463 2,582 861 95 956' 1964 19,738 2,284 817 3,101 18,073 1,643 751 2,394 1,720 861 61 922 1965 17,106 2,392 709 3,101 16,430 1,643 681 2,324 861 861 26 887 1966 14,350 2,508 593 3,101 14,787 1,643 611 2,254 1967 11,460 2,614 475 3,089 13,144 1,643 541 2,184 1968 8,449 2,661 349 3,010 11,501 1,643 471 2,114 1969 5,392 2,670 223 2,893 9,858 1,643 401 2,044 1970 2,328 1,541 96 1,637 8,215 1,643 332 1,975 1971 594 343 23 366 6,572 1,643 262 1,905 1972 251 106 9 115 4,929 1,643 192 1,835 1973 145 110 5 115 3,286 1,643 122 1,765 1974 35 35 1 36 1,643 1,643 52 1,695 See footnotes at end of table, Table A-2: UUGUAY - ESTIMATED CONTMACTUAL INTMREST AND AMDRTIZATION PATMWNTS ON TI EXT AL PUBLIC DEBT - Contd. (E:pressed in thousands of U.S. dollars) Pae Total sterling debt Sterlinr securities/ IBRD-loan (sterling portion) Year Debt out- Payments durinp- year Debt out.- Payments during ear Debt out- Payments during year standing Amorti- In- Total standing Amorti In Total standing Amorti- In- Total Jan. 1 zation terest Jan. 1 sation terest Jan. 1 zation terest 1953 42,126 1,193 19473 2,666 41985 1,193 1,467 2,660 141 6 6 1954 40,016 1,260 1,406 2,666 39,875 1,260 1,4o 2,660 141 - 6 6 1955 37,779 1,348 1,325 2,673 37,638 1,341 1,319 2,660 141 7 6 -13 1956 35386 1,435 19238 2,673 35,252 1,428 1,232 2,660 134 7 6 '13 1957 32,837 1525 1,147 2,672 32,710 1,518 1,142 2,660 127 7 5 12 1958 30,122 1,620 1,052 2,672 30,002 1,613 1,047 2,460 120 7 5 12 1959 27.,234 1,712 952 2,664 27,121 1,705 947 2,652 113 7 5 12 1960 24,166 1,734 847 2,581 24,060 1,727 843 2,570 106 7 4 11 1961 20,987 1,846 735 2,581 20,888 1,839 -731 2,570 99 7 4 11- 1962 17598 1,964 617 2,581 17,506 1*957 613 2v570 92 7 # 11 1963 13,987 1,945 490 2,435 13,902 1,938 487 2,425 85 7 3 10 1964 10,385 1,676 364 2,040 10,307 1,669 361 2,030 78 7 3 10 1965 7,200 1,788 252 2,040 7,.129 1,781 249 2,030 71 7 3 10 1966 3'796 1,382 134 1,516 3,732 1,375 131 1506 64 7 3 10 1967 1,210 200 45 245 1,154 193 42 235 56 7 3 10 1968 993 209 35 244 944 202 33 235 49 7 2 9 1969 767 217 27 244 725 210 25 235 42 7 2 9 1970 531 225 18 243 496 218 17 235 -35 7 1 8 1971 286 158 12 170 258 151 11 162 28 7 1 8 1972 94 80 4 84 73 73 3 76 21 7 1 8 1973 14 7 7 14 7 7 1974 7 7 7 7 7.7 4- j/ It was assumed that bonds would be retired by purchases in the open market at prices varying from 75 to 100 for different individual issues,. Z/ Includes Swiss franc portion of MED which is too small to be shown separately.. 2/ It was assumed that bonds would be retired by purchases in the open market at prices varying from 5 to 100 for different individual issues, (6Less than $50o.- IED - Statistics Section May 21. 1953