Peru - Summary of the external public debt

RESTRICTED F E Report No. E.C. 46 This document was prepared for internal use in the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT SUMMARY OF THE EXTERNAL PUBLIC DEBT OF PERU July 6, 1955 Economic Staff Prepared by: Nicola L. Caiola Reviewed by: Carel deBeaufort Table of Contents Page I. Outstanding External Public Debt II. Service Status of Public Issues 3 III. Pledges of Revenues and Assets 5 Tables: S-l: Summary of External Public Debt of Peru A-l: External Public Debt of Peru A-2: Estimated Contractual Interest and Amortization Payments on the External Public Debt of Peru SUMMARY OF THE EXTERNAL PJBLIC DEBT OF PERU I. Outstanding External Public Debt 1. As of December 31, 1954 the estimated external public debt (including undisbursed portions) of Peru, plus obligations guaranteed by the Peruvian Govern- ment amounted to the equivalent of US$120.2 million. During the five months, January 1 to May 31, 1955 new obligations equivalent to US$36.8 million have been contracted by Peru through a privately- placed loan payable in U.S. dollars (US$15 million), two IBRD loans (US$20.5 million) and a loan from the Export-Import Bank (US$1.3 million). Following is a summary of the external public debt: (in thousands of US$ equiv.) Debt Outstanding December 31,1954 U.S. dollar debt Bonds $ 66,274 Other privately-held debt 20,423 IBRD loans 8,637 U.S. Government loans 5,390 Total U.S. dollar debt . . . . . . . . . . . . . $100,72 Canadian dollar debt (IBRD loan) . . . . . . . 482 Sterling debt (Bonds) . . . .. * . . . .. .. . 12,182 Argentine pesos (Government loan) . . . . 6,241 Swiss francs (IBRD and private loans) . . .53 Netherlands (IBRD loan) . . . . . . . . . . . . 47 Total debt . . . . . . . . . . . . . . . . . . . $120,229 Debt contracted in 1955 up to May 31, 1955 U.S. dollars . . . . . . . . . . . . . . . $ 36,830 Grand total as of May 31, 1955 disregarding amortizations during 1955 ...................... $157,059 2. In February 1954 the Peruvian Government concluded agreements entitling it to receive credits in the amount of $30 million for currency stabilization as follows: In the form of currency purchases $12.5 million from the International Monetary Fund and an equal amount from the U.S. Treasury, and in the form of a loan, $5 million, from the Chase Manhattan Bank. Whatever part is utilized is to be repaid within three years from the date of drawing. These loans and their eventual service are not included in the statement of the debt and in the estimated contra- ctual payments presented in this report. As yet Peru has made no use of this arrangement. -2- 3. U.S. dollar debt Of the total external debt outstanding as of December 31, 1954, $100.7 million or 84% is payable in U.S. dollars. This group consists of: (a) Publicly-issued bonds. The major part of this group is formed by dollar bonds totalling $66.3 million. These bonds are the subject of an adjustment offer which became effective on January 19, 1953. The offer is discussed in footnote 2 of Table A-1. As of December 31, 1954, bonds with a total nominal value of $54.9 million were assented to the plan. (b) Privately-placed debt. The second portion of the dollar obligations is made up of two private loans to the government and private participations in two IBRD loans. The first of the private loans is from the Banque de Paris et des Pays Bas now outstanding in the amount of $10.3 million financing the construction of an iron and steel plant for the government-owned Santa Corporation, and the second is from the International Petroleum Company ($9.1 million) for the financing of road construction. In addition there were private participations in IBRD loans to the Government ($250,000) and to the Banco de Fomento Agropecuario del Peru ($748,000). These participations have no IBRD guarantee. Privately-placed debt accounts for 17% of the total external debt. (c) IBRD loans. As of December 31, 1954, Peru contracted four loans with the IBRD amounting to $10.5 million. One is a 15-year 4-1/2% loan of 1952 for $2.5 million to finance the improvement of the Port of Callao. The other loans are: a 7-year 4-1/8% loan of 1952 for ,1.3 million, a 7-year 4-1/4% loan of 1954 for $1.7 million and to the Banco de Fomento Agropecuario del Peru an 8-year loan of 1954 for $5 million. These loans were granted to finance the import of agricultural equipment. 'About $482,000 of these loans was disbursed in Canadian dollars, $96,000 in Swiss francs and $47,000 in Netherlands' guilders. By the end of December 1954, $5.8 million remained undisbursed. (d) U.S. Government loans. Obligations due to the U.S. Government totalling $5.4 million consist mainly of a Maritime Administration Loan ($2.5 million) and a Lend-Lease Credit ($2.8 million). 4. Sterling debt This group of debt consists of three bond issues amounting to ;62.7 million, equivalent to US$12.2 million. The Guano loan of 1922 (secured by the tax on domestic sales of guano) is outstanding in the amount of E264,000 (at the rate of $2.80 equivalent, US$738,000). This loan is being regularly serviced. The other two issues totalling 12.2 million (equivalent to US$10.9 million 1/) were the subject of a settlement plan announced by the Peruvian Government on December 17, 1953. In addition the settlement provided for the issuance of non-interest bearing scrip certificates for an estimated amount of l97,000 (US$552,000 equivalent). 1/ Converted to U.S. dollars by converting to new par of L174 (Republic of Peru 6%) and L171 (City of Lima 5%) and then converting to U.S. dollars at L1 = $2.80. - 3- 5. Debt in other currencies The remainder of Peru's external debt consists of an Argentine peso and a privately-placed Swiss franc loan. The Argentine loan was granted in 1949 by the Argentinian Instituto de Promocion del Intercambio and it is still outstanding to the amount of the equivalent of $6.2 million, though it was originally scheduled to be paid off entirely in 1954. The schedule may have been changed by a new agreement between the two governments, but no information is available on this account. In December 1953, Bulher Brothers, a Swiss firm, extended a line of credit to Peru for the financing of the construction of silos. The equivalent of $457,000 is still outstanding on this loan. 6. Debt contracted since December 31, 1954 In addition, since December 31, 193T, new obligations have been contracted by Peru through: (a) Two additional loans totalling $15 million equivalent from the Banque de Paris et des Pays Bas to the Santa Corporation. (b) Two IBRD loans: one to the Government (,18 million) for the financing of an irrigation project, and the other to the Compania National de Cemento Portland del Norte to finance the construction of a cement plant ($2.5 million). (c) A $1.3 million Export-Import Bank loan to the Banco Central de Reserva del Peru for the purchase of hospital equipment. (d) On May 25, 1955, the A.S. Aloe Co. of Missouri, U.S.A., granted a $3.5 million loan to Peru for the purchase of hospital equipment. No further information being available at this time, this loan was not included in the total debt figures given in this report. II. Service Status of Public Issues a) Historical 7. Apart from one of the sterling issues (the Guano Loan 1/), service on the whole of Peru's publicly-issued external debt was suspended in 1931 and remained in default until 1947. In that year the Peruvian Government unilaterally offered to bondholders of defaulted dollar and sterling bonds a plan for resuming service, which was rejected by the U.S. and British bondholders' representatives. On November 14, 1951, the Peruvian Government publicly announced the terms of a readjustment plan, negotiated with the Foreign Bondholders Protective Council Inc. of New York, which was approved by the Peruvian Congress in late 1952 and was put into operation on January 19, 1953. Similarly, negotiations in 1953 between the British Council of Foreign Bondholders and the Peruvian Government resulted in an agreement for the settlement of the Peruvian Government's two London bond issues. For complete details of the settlement plans see footnotes 2, 16 and 17 of Table A-1, attached to this report, and IBRD External Debt Study on Peru, EC-32, of March 29, 1954. 1/ These bonds originally paid interest at 7-1/2% and had a cumulative sinking fund of 1-1/2/0 per annum. In 1938, interest was reduced to 4% and the Government agreed to pay &52,170 per annum to cover interest and sinking fund. -14- 8. Annual service payments The following table shows yearly service charges on the external direct and guaranteed public debt of Peru in each of the years 1955 through 1979. A large total of US$18.2 million for 1955, is caused by an estimated payment of $6.2 million on the Argentine peso loan and by the assumption that full assents to settlement plans for dollar and sterling bonds will require cash payments during 1955 totalling $1.9 million on account of interest arrears. In 1956 service charges reach a more normal level of US$10.5 million consisting of $5.1 million for interest and $5.4 million for amortization. Payments average $13 million through 1960 and subsequently decline from $11.4 million to $4.6 million during the next ten years through 1970. Service payments remain at a level of $4.5 million from 1971 to 1977 and drop sharply to about $1.8 million in 1978 and 1979. The estimated payments for the dollar and sterling bonds under the 1953 settlement plans, included in the above- mentioned figures, are based on the assumption that the dollar bonds will be bought in the open market at an average price of 50 through 1964 and at 75 thereafter, and the sterling bonds will be purchased at an average price of 50. For additional details see Table A-2. (in thousands of U.S. dollar equiv.) Total 1/ Service payments by currency of payment Debt out- Payments during year Argen- standing Amorti- Inter- i Neth. tine Year January 1 zation est Total US$ Can.$ Sterl. Sw fr guild. B fr pesos 1955 120,229 -11-,443 6,715 1,161 10,129 87 1,593 105 4 2 6,217 1956 141,833 5,079 5,400 10,479 9,673 119 549 114 18 6 1957 135,493 7,605 5,118 12,723 11,974 82 549 107 8 3 1958 126,564 8,301 4,726 13,027 12,218 122 549 114 18 6 1959 116,872 9,1140 4,304 13,444 12,689 120 549 62 18 6 1960 106,270 9,703 3,840 13,543 12,992 515 12 18 6 1961 95,031 8,1114 3,331 11,445 11,006 403 12 18 6 1962 85,301 6,071 2,959 9,030 8,591 403 12 18 6 1963 77,532 4,798 2,659 7,457 7,018 403 12 18 6 1964 70,947 4,046 2,422 6,468 6,029 403 12 18 6 1965 65,020 3,646 2,206 5,852 5,413 403 12 18 6 1966 60,499 3,187 2,043 5,230 4,802 403 8 13 4 1967 56,407 3,192 1,918 5,110 4,707 403 1968 52,275 2,983 1,793 4,776 4,373 403 1969 48,532 3,094 1,663 4,757 4,373 384 1970 44,664 3,093 1,531 4,624 4,240 384 1971 40,766 3,092 1,400 4,492 4,108 384 1972 36,834 3,227 1,264 4,491 4,107 384 1973 32,727 3,363 1,128 4,491 4,107 384 1974 28,449 3,510 981 4,491 4,107 384 1975 23,984 3,663 829 4,492 4,108 384 1976 19,322 3,818 673 4,491 4,107 384 1977 14,465 3,987 505 4,492 4,108 384 1978 9,391 1,464 334 1,798 1,414 384 1979 7,690 1,469 260 1,729 1,345 384 1/ Does not include payments on the 4§2,844,000 U.S. Government Lend-Lease credit for which repayment terms are not readily available. -5- III. Pledges of Revenues and Assets 9. All of the public external bonds now outstanding were secured by pledges of Goverment revenues or assets. The Bank has no complete details of the provisions of all the original contracts with regard to these pledges. The Debt Adjustment Plan offered on January 19, 1953, contained the following reinstatement clause: '. . . in case default shall be made in the payment of principal, interest or sinking fund on the New Bonds, each such New Bond shall thereafter be entitled to the payment of service, to the enjoyment of security, and to the benefit of all of the other provisions of the original bond contracts relating to the bond or bonds in exchange for which the New Bond has been issued except that the Republic shall be principal obligor on the City of Lima thirty-year 6-1/2% Second Sinking Fund Gold Bonds". The loan from the International Petroleum Co. is secured by a preferred pledge of the revenues derived from state taxes on the consumption of petroleum and its derivatives. The 1951 loan from the Banque de Paris et des Pays Bas is secured by the revenues from export, import and other taxes which the Corporation Peruana del Santa receives in accordance with Law No.10,090. Table S-1; PERU - SU1RARY OF EXTERWAL PUBLIC DEBT National and Government Guaranteed Debt (Amounts in thousands of U. S. dollar equivalents) Page 1 Item Amount % TOTAL EXT-,RNAL PUBLIC DEBT OUTSTAlfDING DECEMBER 31, 1954 120,229 100.00 Disbursed and still outstanding 113,633 94.51 Undisbursed 6,596 5.49 U. S.DOLLARS 100,724 83.78 Disbursed and still outstanding 94,128 78.29 Undisbursed 6,596 5.49 Publicly-issued bonds 66,274 55.12 Privately-placed debt 20,423 16.99 Disbursed and still outstanding 19,675 16.37 Undisbursed 748 0.62 Loans held or guaranteed by IBRD 8,637 7.19 Disbursed and still outstanding 2,789 2.32 Undisbursed 5,848 4.87 U.S. Government loans 5,390 4.48 CANADIAN DOLLARS (IBRD loan) 482 0.40 POUNDS STERLING (publicly-issued bonds) 12.182 10.13 ARGENTINE PESOS (government loan) 6,241 See footnote at end of table Table S-1: PERU - SUMMARY OF EXTERNAL PUBLIC DEBT (Continued) National and Government Guaranteed Debt (Amounts in thousands of U. S. dollar equivalents) Page 2 Item Amount % TOTAL EXTERNAL PUBLIC DEBT OUTSTANDING DECEMER 31, 1954 (Continued) SWISS FRANCS 53 0.46 Privately-placed debt 457 0.38 IBRD loan 96 0.08 NETHERLANDS GUILDERS (IBRD loan) 47 0.04 BELGIAN FRANCS (IBRD loan) L A. MAJOR REPORTED CHANGES JANUARY 1 - MAY 31, 1955 36830 U.S.DOLLARS 36,83o Privately-placed debt 15,806 Loans held or guaranteed by IBRD 19,694 U.S. Government loan 1,330 /L As of December 31, 1954 no Belgian francs had been disbursed. IBRD - Economic Staff June 21, 1955 Table A-1: PERU - EXTERNAL PUBLIC DEBT National and Government Guaranteed Debt (In thousands) Page 1 Debt outstanding Major reported changes Dec. 31, 1954 Jan. 1 - May 31,1955 I tern In currency In U. S. dollar In currency In U. S. dollar of payment equivalents of payment equivalents TOTAL EXThRiAL PUBLIC UT /1 120,229 + 36,830 U.S.DOLLAR DEBT $ 100,724 100,724 + $ 36,830 + 36,830 Publicly-issued bonds g $ 66,274 66,274 $65,243,000 Republic of Peru S.F. 3%, 1952-1997 $ 54,881 54,881 $6,170,525 scrip certificates, no interest, 1953-1967 $ 5,058 5,058 Unassented bonds $63,269,000 Republic of Peru Series A-E 2 1/2%, 1947-1997 $ 570 570 $15,000,000 Republic of Peru Sec.S.F.Gold 7o, 1927-1959 $ 639 639 $50,000,000 Peruvian National Loan Ext.S.F.Gold lst Series 6%, 1927-1960 $ 3,333 3,333 $25,000,000 Peruvian National Loan Ext.S.F.Gold 2nd Series 6%, 1928-1961 $ 1)439 1,439 $1,500,000 Province of Callao Gtd.Sec.S.F.Gold 7 1/2%, 1927-1944 $ 82 82 $3,000,000 City of Lima Ext.Sec.S.F. 6 1/2%, 1928-1958 $ 272 272 Privately-placed debt $ 20,423 201423 + $ 15,806 + 15,806 $10,000,000 Republic of Peru from International Petroleum Co. 4 1/8%, 1953-1963 h3 $ 9,105 9,105 $250,000 participation at 3 1/4 for 1956-1958 in $1,700,000 IBRD loan to Rep.of Peru 4 1/4%, 1954-1961 $ 250 L 250 See footnotes at end of table Table A-1: PERU - EXTERNAL PUBLIC DEBT (Continued) National and Government Guaranteed Debt (In thousands) Page 2 Debt outstanding Major reported changes Item Dec. 31, 1954 Jan. 1 - May 31,1955 In currency In U. S. dollar In currency In U. S. dollar of nayment equivalents of payment eauivalents TOTAL EXT-RN,7AL PU 3LIC DEBT /.1 (Continued) U.S.DOLLAR DEBT (Continued) Privately-placed debt (Continued) $748,000 participation at 3 1/4 for 1957-1958 in $5,000,000 IBRD loan to Banco de Fomento Agro- pecuario del Peru 4 1/45, 1954-1963 11 $ 748 L 748 $496,000 participation at 3 3/VI for 1959-1960 in $18,000,000 IBRD loan to Rep.of Peru 4 3/i2, 1955-1980 +$ 496 Lt + 496 $310,000 participation at 3 3/4% for 1958-1959 in $2,500,000 IBRD loan to Compania Nacional de Cemento Portland del Norte 4 5/8,1955-1970 -L +$ 31018 + 310 $12,000,000 Corp.Peruana del Santa loan from Banque de Paris et des Pays-Bas 5 1/46-6%, 1951 (Chimbote steel loan) LJ 5J1 /10 $ 10,320 L11 10,320 $6,000,000 Corp.Peruana del Santa loan from Banque de Paris et des Pays-Bas, 1955 /10 + $ 6,000 + 6,000 $9,000,000 Corp.Peruana del Santa loan from Banque de Paris et des Pays-Bas 1955 10 + $ 9,000 + 9,000 Loans held or guaranteed by IBRD $ 8,637 8,637 + $ 19,694 + 19,694 Portion of $2,500,000 loan to Rep.of Peru 4 112%, 1952-1967 $ 2,220 /12 2,220 Portion of $1,300,000 loan to Rep.of Peru 4 1/8%, 1952-1959 $ 7Lla 715 Portion of $1,700,000 loan to Rep.of Peru 4 1/VPI 1954-1961 1,450 14 1,450 See footnotes at end of table Table A-1: PERU - EXTERNAL PUBLIC DEBT (Continued) National and Government Guaranteed Debt (In thousands) Page 3 Debt outstanding Major reported changes Item Dec. 31, 1954 Jan. 1 - May 31,1955 In currency In U. S. dollar In currency In U. S. dollar TOTAL EXT RNAL PUBLIC DEBT 11 (Continued) of payment equivalents of payment equivalents U.S.DOLLAR MEBT (Continued) Loans held or guaranteed by IBRD (Continued) Portion of $5,000,000 loan to Banco de Fomento Agro- pecuario del Peru 4 1/4P2, 1954-1963 L $ 4,252 /6 4,252 Portion of $18,000,000 loan to Rep.of Peru 4 314, 1955-1980 + $ 17,504 12 + 17,504 Portion of $2,500,000 loan to Compania Nacional de Cemento Portland del Norte 4 5/8%,1955-1970 £5 + D 2,190 /8 + 2,190 U.S. Government loans $ 5,390 5,390 + $ 1,330 + 1,330 $444,158.84 Export-Import Bank loan to Corporacion Peruana del Santa 4, 1945-1956 L $ 79 79 $1,330,000 Export-Import Bank loan to Banco Central de Reserva del Peru 5%, 1955 L5 /14 + $ 1,330 + 1,330 $4,099,500 Maritime Administration loans 3 1/2%, various maturities j5. $ 2,467 2,467 Lend-lease credit jLi $ 2,844 2,844 CANADIAN DOLLAR DEBT Can$ 466 482 IBRD loan Can$465,773 portion of $1,300,000 loan to Republic of Peru 4 1/8%, 1952-1959 Can$ 466 /13 482 See foootnotes at end of table Table A-i: PERU - EXTEMNAL PUBLIC DEBT (Continued) National and Government Guaranteed Debt (In thousands) Page 4 Debt outstanding Major reoorted changes Item Dec. 31, 1954 Jan. 1 - May 31,1955 In currency In U. S. dollar In currency In U. S. dollar of nayment equivalents of -payment eouivalents TOTAL EXT'RNAL PUBLIC DEBT 11 (Continued) ST2,RLING DEBT Z 2,704 12,182 Publicly-issued bonds £1,250,000 Republic of Peru Vp (formerly 7 1/2-4) 1922 Guano loan /16 £ 264 738 Bonds eligible for 1953 plan /17 £2,000,000 Republic of Peru National Loan Ext.S.F.Gold 2nd Series 6%, 1928-1961 z 1,833 /18 8o929 £600,000 City of Lima Sterling Loan 5,,1911-1965 £ 410 / 1,963 Scrip certificates, no interest, 1953-1968 E 197 11- 552 ARGENTINI PESO DEBT M$N _2LO28 6,241 Government loan MN 80,779,138 Instituto de Promocion del Inter- cambio Argentino loan,no interest, 1949-1954 M$N 25,028 6,241 SWISS FRANC DEBT SwF 2367 5a Privately-placed debt SwF 1,956,738.65 Buhler Bros. to Rep. of Peru 5'0, 1953, 5 years /20 SwF 1,957 457 IBRD loan Portion of $2,500,000 loan to Rep.of Peru 4 1/2/%, 1952-1967 SwF 410 .ig 96 See footnotes at end of table Table A-1: PERU - EXTFRTAL PULIC DBT (Continued) National and Government Guaranteed Debt (In thousands) Page 5 Debt outstanding Major repDorted changes Item Dec. 31. 1954 Jan. 1 May 31.1955 In currency In U. S. dollar In currency In U. S. dollar -of -Payment equivalents of -Payment equivalents TOTAL EXPER-!AL PUBLIC DEBT L (Continued) NTT!LRLJANDS GUILDER DEBT f. 178 ___Z IBRD loan Portion of $2*500,000 loan to Rep. of Peru 4 1/2%, 1952-1967 f. 178 /12 47 BELGIAI, FRABC DEBT /12 /12 IBRD loan Portion of $2,500,000 loan to Rep. of Peru 4 1/25%, 1952-1967 /12 /12 Exchange rates - The following exchange rates have been used: Par values:,E 1 = $2.80; f.1 $0.263158; BF 1 = $0.02 Current market rates: Can$1 $1-03418? as of December 31, 19.54 and $1.01102 as of April 30, 1955; SwF 1 $0.23337 as of December 31, 1954a and Anril 30, 1955. Other rates: M$N 1 - $0.249377 (contractual) JL] Does not include the following: a. Stand-by credits in the amount of $30,000000 for currency stabilization, repayable within three years of the date of each withdrawal: $12,500,000 from the IMPF $12,500,'000 from the U.S. Treasury $ 5,000,000 from the Chase Manhattan Bank of New York The first two credits will be in the form of currency purchases. The Chase TjEnh-ttan Bank loan, if drawn down, will bear interest at 3 3/4= p.a. and commitment fees will be 3/4 p-a- Table A-i: PMhU - EXTWRNAL PUBLIC EEBT (Continued) Page 6 /L (Continued) b. A loan of $3,500,000 to Peru from A.S. Aloe Co., granted May 25, 1955. This loan is to be repaid in 5 years. Information about the interest rate and repayment terms is not readily available at this time. L2. The dollar bonds of Peru were fully serviced until 1931 when the Republic susnended service on external debt. Under offers in 1937 and 1938 partial payments were made on certain 1931 and 1932 coupons, but no payments were made there- after until the debt adjustment plan of 1947 went into operation. Under an exchange offer of June 26, 1947, Series A-D bonds were issued in exchange at par for Republic of Peru 7 , 1927-1959, Peruvian National Loan 1st Series 6%, 1927-1960, the U.S. dollar tranche of the Peruvian National Loan 2nd Series 65, 1928-1961, and Province of Callao 7 1/2, 1927-1944 dollar bonds. The offer provided that interest arrears up to December 31, 1946 were to be cancelled, and that interest would be paid on the new bonds at 1% for 1947-1948, at 1 1/2;; for 1949-1950, at 2% for 1951-1952, and at 2 1/2b thereafter. A cumulative sinking fund was provided. Under an offer of December 31, 1947, Series E dollar bonds were issued in exchange for the sterling tranche of the Peruvian National Loan 2nd Series 6%, 1928-1961 and the City of Lima 5T, 1911-1965. Prior to December 31. 1949 ex- change was made at $4.00 principal amount of Series E bonds for £1 of old bonds (plus a cash adjustment of $0.03 per £l). Since that date, the offer was extended at the rate of $2.80 of Series E bonds for £1 of old bonds, Interest rate provisions on Series E bonds were the same as for Series A-D bonds. A cumulative sinking fund was provided. Neither of these offers was recommended by the respective bondholders' councils. As a result on January 19, 1953 the Republic offered new bonds with an interest rate of 3% p.a. from January 1, 1953 in exchange for all its out- standing dollar bonds (except Series E bonds) on a par for par basis. This offer was extended to holders of Series E bonds on July 26, 1954. A cumulative semi-annual sinking fund of at least $402,708.50 plus interest at 35 p.a. on new bonds retired through the sinking fund and on bonds issued under the 1947 offer which were retired after July 1, 1952 is provided. Depositors of bonds will also receive non-interest bearing scrip certificates in the following amounts per $1,000 bond: Peru 7s/1959 and 2 1/2s/1997 Series A $ 103.83 Peru 6s/1960 and 2 1/2s/1997 Series B 90.50 Peru 7s/1961 and 2 1/2s/1997 Series C 91.50 Callao 7 1/2s/1944 and Peru 2 1/2s/1997 Series D 113.00 Lima 6 1/2s/1958 135.42 Peru 2 1/2s/1997 Series E 96.00 The scrip certificates are redeemable in 15 equal annual instalments from 1953 through 1967. In addition, holders of the four issues which were exchangeable into Series A-D bonds under the 1947 plan will receive a cash payment of $90, and holders of Series E bonds will receive $7.50 per $1,000 bond. Table A-1: PEzRU - EXTERNAL PUBLIC DEBT (Continued) Page 7 3 This loan is secured by a -preferred pledge of the revenues derived from state taxes on the consumption of petroleum and its derivatives (excluding taxes levied on aviation gasoline), in the amounts necessary to cover payments of principal and interest. /4 The status of this loan as of given dates was as follows: December 31, 1954 i4ay 31, 1955 Total (all U.S. dollars) $ 1,700,000 $ 1,700.000 Disbursed and still outstanding 1,092,856 1,175,198 Held by IBRD 842,P56 833,198 Sold to third parties with OURD guarantee - 92,000 Participation by third parties without IBRD guarantee 250,000 250,000 Undisbursed 607,144 524,802 Guaranteed by the Republic of Peru. /6 As of December 31, 1954 this loan was not yet effective. The loan became effective on February 10, 1955. The status as of iiay 31, 1955 was as follows: Total (all U.S. dollars) $ 5,000,000 Disbursed and still outstanding (held by IBRD) 150,000 Undisbursed 4,850.000 IBRD share 4,102,000 Participation by third Tarties without IBRD guarantee 748,000 L.Z This loan became effective on May 23, 1955. As of May 31, 1955 the loan was comnletely undisbursed. J-8 As of May 31, 1955 this loan was not yet effective. L2 This loan is secured by the revenue from import, export and other taxes which the Corporacion Peruana del Santa receives in accordance with law # 10,090. LO In 1951, theBanque de Paris et des Pays-Bas extended a $12,000,000 credit to the Corporacion Peruana del Santa to finance work on the Chimbote steel mill. Table A-1; PERU - EXTERNAL PUBLIC DEBT (Continued) Page 8 L10 (Continued) On iarch 9, 1955 the Banque de Paris et des Pays-Bas extended two additional credits to the Corporacion Peruana del Santa. These new credits carry interest of 3 3/4/ p.a. plus the discount rate of the Bank of France. Under the terms of the contracts, the Banque de Paris et des Pays-Bas will pay suppliers for labor and supplies used in complet- ing work on a steel mill and a hydroelectric power plant. The terms of payment from the Banque de Paris et des Pays- Bas to the suppliers are as follows; a. $6,000,000 credit: 5 on signing the contracti 5FI on presentation of shipping documents for materials or provisional certificates of execution for labor costs; 90o in twelve equal semi-annual instalments of principal beginning 4 1/2 years after signing the contract. b. $9,000,000 credit: 20 on presentation of shipping documents; 80%a in ten equal semi-annual instalments of principal beginning six months after the purchase order. The terms of payment from the Corporacion Peruana del Santa to the Banque de Paris et des Pays-Bas are not readily available at this time. 1_ Estimated by IBRD. /12 The status of this loan as of given dates was as follows: December 31, 1954 May 11, 1955 In currency In U.S. dollar In currency In U.S. dollar of payment euivalents ,of oayment enuivalents Total 2,500,316 /a 2,500,317 /a Disbursed and still outstanding 1L3751 1,761,899 Held by IBRD 905,531 1,364.899 U.S. dollars $ 762,930 762,930 $ 1,076,503 1,076503 Swiss francs SwF 410,284 95,748 SwF 410,284 95,748 Netherlands guilders f. 178,042 46,853 f. 551,167 145,044 Belgian francs - - BF 2,380,203 47,604 Sold to third arties with BRD guarantee (U.S.dollars) $ 468,000 468,000 $ 397,000 397,000 Repaid 138,000 209,000 To IBRD b0,000 68,000 To third parties with IBRD guarantee 70,000 141,000 Undisbursed 988785 529,418 Table A-1; PERU - EXTFNALT PUBLIC DEBT (Continued) Page 9 1Z (Continued) LA The total amount of this loan originally authorized was the equivalent of $2,500,000. The disbursements of the various currencies have been valued at the rates shown in the section above headed "Exchange rates". Since the rate for Swiss francs has changed from the rate ased at the time of actual disbursement, the total shown here differs from the originally authorized amount. 11 The status of this loan as of given dates was as follows: December 31,1954 Vlay 31, 1955 In currency In U.S. dollar In currency In U.S. dollar of payment equivalents of payment equivalents Total 1,303,494 /a 1,293,180 /a Disbursed and still outstanding 1,197,494 1,078.180 Held by IBRD 1,024,244 925,680 U.S. dollars $ 542,229 542,229 $ 503,979 503,979 Canadian dollars Can$ 465.773 482,015 can$ 417,105 421,701 Sold to third parties with IBRD guarantee (U.S. dollars) $ 173,250 173,250 1 152,500 152,500 Repaid 106,000 215.000 To IBRD 35,500 121,750 To third parties with IBRD guarantee 70,500 93,250 /a The total amount of this loan originally authorized was the equivalent of $1,300,000. The disbursements of Canadian dollars have been valued at the rates shown in the section above headed "Exchange rates". Since the rate for Canadian dollars has changed from the rate used at the time of actual disbursement, the total shown here differs from the originally author- ized amount. /14 This loan is to be repaid in 20 equal quarterly instalments of principal. The date of the first principal payment has not yet been settled. /J Repayment terms and interest rate on this credit are not readily available. Li.- This loan is secured by a tax on guano and by a deposit with the bankers' agents of more than 50% of the shares of the Compania del Guano. These bonds originally paid interest at 7 1/2% and had a cumulative sinking fund of 1 1/2p' p.a. In 1938, interest was reduced to Vb and the Government agreed to pay Z52,170 p.a. to cover interest and sinking fund. Table A-1: PERU - EXT-RNAL PUBLIC DEBT (Continued) Page 10 ,' These bonds were serviced regularly until 1931 when Peru suspended payments on external debt. In 1947 the holders of these bonds were offered Series E dollar bonds (see footnote 2). This offer was not approved by the Council of Foreign Bondholders because it did not recognize the dollar clauses (Peruvian National Loan payable in nounds sterling or U.S. dollars at l = $4.8665, City of Lima Loan payable at 21 = $4.80. Therefore, on December 17, 1953 Peru announced the following settlement which was later accepted by the bondholders: a. The contractual dollar option will be honored in respect of principal, future interest and sinking fund instalments by payments in sterling at E1.74 for each -1 nominal amount for the National Loan and £1.71 for £1 of the City of Lima Loan. b. Interest will be paid at 3% p.a. on the new par value beginning April 1, 1954. c. A semi-annual cumulative sinking fund of 1/2? p.a. of the new par value of all bonds outstanding at the time of the offer, to be an-olied to purchase of bonds in the market or redemption at the new -oar, will be provided. d. Maturity will be extended to 2007 on the National Loan and to 2008 on the City of Lima Loan. e. Interest arrears up to December 31, 1946 will be calculated on the original face value and funded at 10) into non-interest bearing scrip certificates which will be retired in 15 equal annual instalments from 1954 through 1968. f. Arrears of interest from January 1, 1947 to October 1, 1953 will be satisfied by a sterling cash payment on April 1, 1954, or as soon as possible thereafter, of Z11-5-0 per £100 original face value for the National Loan and E10-10-0 per £100 original face value for the City of Lima Loan. 118 Converted to U.S. dollars by converting to new par (£174 per £100 nominal amount) and then converting to U.S.dollars at X1=$2.80. /12 Converted to U.S. dollars by converting to new par (£171 per £100 nominal amount) and then converting to U.S.dollars at Zl=$2.80. /20 In December 1953, Buhler Brothers extended a line of credit to Peru in the amount of SwF 2,370,500 plus SwF297,388.65 of interest, calculated at 5P. 1.% of the principal is to be paid on signing the contract, 15p upon the receipt of shipping documents, and the remaining 70% plus the interest is to be paid in 18 equal quarterly instalments beginning nine months after the second 15% principal payment. Peru reports that this second payment was made June 28, 1954. Only the 70% principal plus interest is showm in the table above. IBRD - Economic Staff June 21, 1955 Table A-2: PERU - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMENTS ON THE EXMRNAL PUBLIC DEBT National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Pare 1 Total Li. Service payments by currency of payment Year Debt out- P&vments-durIng Year U. S. Canadian Pounds Argentine Swiss Netherlands Belgian standing Amorti- In- Total dollars dollars sterling pesos franes guilders francs January 1 zation terest 1955 120,229 11,443 6,718 18,161 10,129 87 1,593 6,241 105 4 2 1956 141,833 5,079 5,400 10,479 9,673 119 549 114 18 6 1957 135,493 7,605 5,118 12,723 11,974 82 549 107 8 3 1958 126,564 8,301 4,726 13,027 12,218 122 549 114 18 6 1959 116,872 9,140 4,304 13,444 12,689 120 549 62 18 6 1960 106,270 9,703 3,840 13,543 12,992 515 12 18 6 1961 95,031 8,114 3,331 11,445 11,oo6 403 12 18 6 1962 85,301 6,071 2,959 9,030 8,591 403 12 18 6 1963 77,532 4,798 2,659 7,457 7,018 403 12 18 6 1964 70,947 4,046 2,422 6,468 6,029 403 12 18 6 1965 65,020 3,646 2,206 5,852 5,413 403 12 18 6 1966 60,499 3,187 2,043 5,230 4,802 403 8 13 4 1967 56,407 3,192 1,918 5,110 4,707 403 1968 52,275 2,983 1,793 4,776 4,373 403 1969 48,532 3,094 1,663 4,757 4,373 384 1970 44,664 3,093 1,531 4,624 4,240 384 1971 40,766 3,092 1,400 4,492 4,108 384 1972 36,834 3,227 1,264 4,491 4,107 384 1973 32,727 3,363 1,128 4,491 4,107 384 1974 28,449 3,510 981 4,491 4,107 384 1975 23,984 3,663 829 4,492 4,108 384 1976 19,322 3,818 673 4,491 4,107 384 1977 14,465 3,987 505 4,492 4,108 384 1978 9,391 1,464 334 1,798 1,414 384 1979 7,690 1,469 260 1,729 1,345 384 See footnotes at end of table Table A,-2: PERU - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMENTS ON THE EXTERNAL PUBLIC DEBT (Cont.) National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Page 2 U.S. dollars Total Publicly-issued bonds E42 Privatey-placed debt Year Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- In- Total standing Amorti- In- Total standing 1:aorti- In- Total January 1 zation terest January 1 zation terest January 1 sation terest 1955 100,724 4,820 5,309 10,129 66,274 1,132 2,730 L2 3,862 20,423 3,120 1,987 5,107 1956 128,904 4,650 5,023 9,673 64,302 1,187 1,781 2,968 33,109 2,584 1,818 4,402 1957 123,068 7,222 4,752 11,974 61,929 1,246 1,722 2,968 30,525 4,970 1,647 6,617 1958 114,601 7,844 4,374 12,218 59,438 1,308 1,660 2,968 25,555 5,177 1,374 6,551 1959 105,450 8,716 3,973 12,689 56,823 1,374 1,594 2,968 20,378 5,449 1,107 6,556 1960 95,361 9,473 3,519 12,992 54,076 1,445 1,523 2,968 14,929 5,798 804 6,602 1961 84,444 7,984 3,022 11,006 51,,187 1,519 1,449 2,968 9,131 4,160 482 4,642 1962 74,942 5,938 2,653 8,591 48,150 1,598 1,370 2,968 4,971 2,295 288 2,583 1963 67,407 4,657 2,361 7,018 44,955 1,681 1,287 2,968 2,676 1,326 170 1,496 1964 61,070 3,899 2,130 6,029 41,594 1,770 1,198 2,968 1,350 900 91 991 1965 55,402 3,492 1,921 5,413 38,055 1,864 1,104 2,968 450 450 30 480 1966 51,153 3,033 1,769 4,802 35,434 1,930 1,038 2,968 1967 47,341 3,058 1,649 4,707 32,725 2,001 969 2,970 1968 43,477 2,843 1,530 4,373 29,918 1,864 898 2,762 1969 40,014 2,965 1,408 4,373 27,434 1,939 823 2,762 1970 36,404 2,958 1,282 4,240 24,850 2,016 746 2,762 1971 32,775 2,949 1,159 4,108 22,163 2,097 665 2,762 1972 29,128 3,073 1,034 4,107 19,368 2,181 581 2,762 1973 25,329 3,203 904 4,107 16,461 2,268 494 2,762 1974 21,371 3,339 768 4,107 13,438 2,359 403 2,762 1975 17,247 3,481 627 4,108 10,294 2,453 309 2,762 1976 12,949 3,627 480 4,107 7,024 2,551 211 2,762 1977 8,473 3,782 326 4,108 3,624 2,653 109 2,762 1978 3,808 1,248 166 1,414 88 66 3 69 1979 2,538 1,239 106 1,345 See footnotes at end of table Table A-2: PERU - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMENTS ON THEM, EXTERNAL PUBLIC DEBT (Cont.) National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Page 3 U. S. dollars Canadia dollars (IBR) L5 Loans held or guaranteed by IBRD L_. U.S. govejrnment loans L Year Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- In- Total standing Amorti- In- Total standing Amorti- In- Total January 1 zation terest January 1 zation terest January 1 zation terest 1955 8,637 295 470 765 5,390 273 122 395 482 68 19 87 1956 27,890 341 1,282 1,623 3,603 538 142 680 404 104 15 119 1957 27,549 507 1,265 1,772 3,065 499 118 617 300 70 12 82 1958 27,042 859 1,244 2,103 2,566 500 96 596 230 113 9 122 1959 26,183 1,394 1,196 2,590 2,o66 499 76 575 117 117 3 120 1960 24,789 1,731 1,138 2,869 1,567 499 54 553 1961 23,058 2,072 1,054 3,126 1,068 233 37 270 1962 20,986 1,812 966 2,778 835 233 29 262 1963 19,174 1,416 884 2,300 602 234 20 254 1964 17,758 996 828 1,824 368 233 13 246 1965 16,762 1,043 782 1,825 135 135 5 140 1966 15,719 1,103 731 1,834 1967 14,616 1,057 680 1,737 1968 13,559 979 632 1,611 1969 12,580 1,026 585 1,611 1970 11,554 942 536 1,478 1971 10,612 852 494 1,346 1972 9,760 892 453 1,345 1973 8,868 935 410 1,345 1974 7,933 980 365 1,345 1975 6,953 1,028 318 1,346 1976 5,925 1,076 269 1,345 1977 4,849 1,129 217 1,346 1978 3,720 1,182 163 1,345 1979 2,538 1,239 106 1,345 See footnotes at end of table Table A-2: PERU - ESTIMATED CONTRACTUAL INTEREST A3D AMORTIZATION PAYMENTS ON THE EXTERNAL PUBLIC DEBT (Cont.) National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Page 4 Pounds sterling Argentine pesos Swiss francs (publicly-issued bonds) LZ (government loan) 19 Total Year Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- In- Total standing Amorti- In- Total standing Amorti- In- Total January 1 zation terest January 1 zation terest January 1 zation terest 1955 12,182 213 1,380/-8 1,593 6,241 6,241 - 6,241 553 101 4 105 1956 11,880 199 350 549 452 110 4 114 1957 11,606 207 342 549 342 103 4 107 1958 11,320 218 331 549 239 110 4 114 1959 11,018 230 319 549 129 59 3 62 1960 10,699 202 313 515. 70 9 3 12 1961 10,405 101 302 403 61 10 2 12 1962 10,206 103 300 403 51 10 2 12 1963 10,002 109 294 403 41 11 1 12 1964 9,786 115 288 403 30 11 1 12 1965 9,559 120 283 403 19 11 1 12 1966 9,321 129 274 403 8 8 /10 8 1967 9,066 134 269 403 1968 8,798 140 263 403 1969 8,518 129 255 384 1970 8,260 135 249 384 1971 7,991 143 241 384 1972 7,706 154 230 384 1973 7,398 160 224 384 1974 7,078 171 213 384 1975 6,737 182 202 384 1976 6,373 191 193 384 1977 5,992 205 179 384 1978 5,583 216 168 384 1979 5,152 230 154 384 See footnotes at end of table Table A-2: PERU - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMETS ON THE IXTTRNAL PUBLIC DEBT (Cont.) National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Page 5 Swiss francs Privately-placed debt IBRD loan 4-1\Ttherlands guilders (IBRD) Ll Year Debt out- Payments during year Debt out- Payments durinp year Debt out- Payments durine year standing Amorti- In- Total standing Amorti- In- Total standing Amorti- In- Total January 1 zation terest January 1 zation terest January 1 zation terest 1955 457 101 /11 101 96 - 4 4 47 - 4 4 1956 356 102 /11 102 96 8 4 12 145 12 6 18 1957 254 102 11 102 88 1 4 5 133 2 6 8 1958 152 102 11 102 87 8 4 12 131 12 6 18 1959 50 50 11 50 79 9 3 12 119 14 4 18 1960 70 9 3 12 105 14 4 18 1961 61 10 2 12 91 14 4 18 1962 51 10 2 12 77 15 3 18 1963 41 11 1 12 62 16 2 18 1964 30 11 1 12 66 16 2 18 1965 19 11 1 12 30 17 1 18 1966 8 8 /10 8 13 13 /10 13 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 See footnotes at end of table .Table A-: PLRU - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMENTS ON THE EXTERNAL PUBLIC DEBT (Cont.) National and Government Guaranteed Debt (In thousands of U.S. dollar equivalents) Belgian francs (IBRPD) i Year Debt out- Payments during year Ll Does not include payments on the $2,844,000 U.S. Government standing Amorti- In- Total Lend-lease credit for which repayment terms are not readily January 1 sation terest available. 1955 - - 2 2 L it was assumed that unassented bonds would assent during 1955, 1956 48 4 2 6 and that bonds would be retired by purchase in the open market 1957 44 1 2 3 at an average price of 50 through 1964, 75 thereafter. 1958 43 4 2 6 1959 39 4 2 6 a Includes $894,000 for interest arrears 1947-1954 due on unassent- 1960 35 5 1 6 ed bonds. 1961 30 5 1 6 1962 25 5 1 6 L It was assumed that the French bank loans will be fully disburs- 1963 20 5 1 6 ed in 1955 that interest on the 1955 loans will be paid at the 1964 15 5 1 6 rate of 6 3/4% p.a., and that payments from the Corp. Peruana 1965 10 6 06 del Santa to the Banque de Paris et des Pays-Bas will be the 1966 4 4 A-0 4 same as the payments from the Banque to the suppliers (see 1967 footnote 10, Table A-1). 1968 1969 The schedules of repayment for IBRD loans are based on the status 1970 as of Ma, 31, 1955. 1971 1971 L It was assumed that payments on the $1,330,000 Export-Import 1972 Bank loan will begin in 1956. 1973 1974 LZ It was assumed that all bonds would assent during 1955, and that 1975 bonds would be retired by purchase in the open market at an 1976 average price of 50. 1977 1977 /8~ Includes .0366,000 ($1,024,800) for interest arrears 1947-1954 1978 due on unassented bonds. 1979 /L It was assumed that this loan, originally due in 1954, will be repaid in 1955. / Less than $500. IBRD - Economic Staff /11 Interest is included in principal. June 21, 1955