Paris Club reschedules €717 million of Gabon's debt

By Reshmi Basu

New York, June 10 - The Paris Club creditor countries said they would reschedule €717 million in debt owed to them by the Republic of Gabon.

The accord consists of the rescheduling of €456 million in debt arrears and €261 million of maturities falling between May 1, 2004 and June 30, 2005.

The agreement follows the International Monetary Fund's approval of a stand-by arrangement on May 28 for the financing needs of the West Central African nation.

The agreement adheres to the Paris Club's classic terms: all credits will be paid progressively over 14 years, including three years of a grace period.

The rescheduling is expected to reduce the debt owed to Paris Club members to €270 million from €953 million.

"This consolidation is expected to make an important positive contribution to Gabon's economic outlook and to strengthen its financial situation," the Paris Club said in a news release.

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

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