The external debt of Nicaragua

 - " - -~--.---'~. ,\ ; J ,', ,- ... 1 ,.,., I No. E-224 J _.'-:,I 67153 This report is not to be published nor may it be quoted as representing the Bank's views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT THE EXTERNAL DEBT OF NICARAGUA June 16, 1952 Economic Department Prepared by: Andrew C. Huang Reviewed by: Carel deBeaufort  Table of Contents I Page I. Debt outstanding 1 II. Service Payments 2 III. Pledges of Revenues 2 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.  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 0.8 IBRD loans 5.3 2/ Eximbank loans 1.21/ Sub-total 10 B) Sterling debt Bonds Grand total 2. 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, 1952. 3. 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 1954-1962. 4. The $2 million 1941 Eximbank loan for highway construction is repayable betvreen December 1950 and June 1955. The $600,000 1951 power generator loan is repayable between May 1953 and May 1962. 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 1946-49 service was reslLiled in 1950 in accordance with the 1937 DOOt t'l.greement. 2/ 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. 2/ Of which ~~5. 2 million was undisbursed. 3/ Of which $0.5 million was undisbursed. TI/ Of which $5.7 million was undisbursed. Y For details of the 1937 Agreement see The Council of the Corporation of Foreign Bondholders, London, Annual Report for 1945.  - 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: . 1952 1,628 1956 1,236 1960 770 1953 719 1957 1,544 1961 74.3 1954 884 1958 1,126 1962 125 1955 1,264 1959 793 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 11 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 1945. 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 1910-20.  Table A-l; NICARAGUA: EXTERl,I1AL PUBLIC DEBT National and sovernment guaranteed debt (In thousands) Page 1 Debt outstanding Deqember 31. 1951 Identification In currency Expressed in of pa.yment U.S. dollars U" S. DOLLARS DEBT Bank of America loan to National ~ank of Nicaragua 3 1/2:%, 1947-1955 11 .' $ 79211 ....:m1l Loans from international organizations I.B.R.D. loan to Republic of Nicaragua 4 1/8%. 1951-1961 $3 •.500 y ),500 Y I.E.R.!). loan to Republic of Nicaragua 4 3/8%, 1951-1962 $ 550 II 550 JJ I .B.R.D.loan to Banco lifacional de Nica.ra.gua. 4%, 1951-1958 $1.200 !±I 1,200 !:J:} Total loans from international organizations ~2125.9, 51 250 u.s. Government loans Export-Import Bank loan to Republic of lUcaragua. 4%, 1941-1955 $ 627 627 Export-Import Bank loan to Empresa de Luz y Puerza. Electrica. S.A. 4%. 1951-1962 i/ $ 600;d 600 j} Total U.S. Government loans $1,22Z 1,221 &J Total U.S. dollar debt ~:7t276 7.276 ST.EBLUTG DEBT Sterling securities The Ethel'burga loan 4% (formerly 6%), 1909-1957 ,£ 2:25 TOTAL EXTilRl~AL Pu.!:iLIC DEBT Debt Summa~ Bl Curfencz (Amounts expressed in U.S. dollars) Currency Amount Percent U.s. dollars I'. " Disbursed and still outstanding 1,,566 19.60 Undisbursed 5,710 71.47 Total 7 2 216 21 .01 Pounds sterling , 111 8.9J All currencies 1.t2.§2. 100tOO Exchange rate; £1 = $2.80.  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, 1952. Y Of this amount $61,856 had been disbursed, and $3.438,144 was still undisbursed as of Deeember 31, 1951. JJ This loan was not yet effective on December 31, 1951, ~ All undisbursed as of December 31, 1951. 21 This loan is unconditionally guaranteed by the Republic of Nicaragua.. Of this amount, $77.500 had been disbursed and $522,500 was still undisbursed as of December 31, 1951. £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 19.54. . ~e interest rate was not mentioned. IERn - STATISTICS SECTION June .5, 19.52  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 1952 799l/ 799 28 827 5,250 108 108 1,227 369 261 630 1953 5,250 216 216 858 243 247 4-90 1954- 5.250 279 214 493 615 110 218 328 1955 4't971 726 197 923 505 85 193 278 1956 4~245 778 167 94-5 420 60 168 228 1957 3,4-67 810 135 945 360 60 144- 204 1958 2.657 844 102 94-6 300 60 120 180 1959 1~813 567 70 637 240 60 96 156 1960 1,246 592 46 638 180 60 72 132 1961 654 614 21 635 120 60 48 108 1962 4() 40 1 41 60 60 24 84 See footnotes on page 2.  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 Total U.S. do1la.r debt Sterling securities 3/ Total debt zl Service payments Year 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 1952 7'~276 1,168 397 1,565 713 35 28 63 7~989 1,203 425 1~628 1,565 63 1953 6,108 243 463 706 669 37 26 63 6,777 280 489 769 706 63 1954 5,865 389 432 821 623 39 24 63 6,488 428 456 884 821 63 19.55 5.476 811 390 11'201 575 41 22 63 6,051 852 412 1;264 1,201 63 1956 4,665 838 335 1,173 524 43 20 63 5,189 881 355 1,236 1,173 63 1957 3.827 870 279 1,149 471 377 18 395 4,298 1,247 297 1,544 1,149 395 1958 2,957 904 222 1,126 2,,957 904 222 1'..-126 1.126 1959 2,053 627 166 793 2~053 627 166 793 793 1960 1,426 652 118 ';',770 1,426 652 118 770 770 1961 774 674 69 743 774 674 69 743 743 1962 100 100 25 125 100 100 25 125 125 11 The I.B.R.D. has been informed that this loan was entirely repaid on April 25. 1952. 1/ 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 5. 1952