Russia, Paris Club ink deal on pre-term debt repayment

Other News Materials 30 June 2006 17:19 (UTC +04:00)

(RIA Novosti) - Russia and the Paris Club of creditor nations Friday signed a multilateral protocol on pre-term payment of Russia's $21.3 billion debt.

Deputy Finance Minister Sergei Storchak signed for the Russian side, while French Ambassador to Russia Jean Cadet signed for the Paris Club, reports Trend.

"We will repay the remaining $21.3 billion of Russia's Paris Club debt as early as before the end of August," Storchak said, adding that the remaining debt had been restructured in 1996 and 1999.

Storchak said Russia would thereby save $7.7 billion in interest payments. The country's Paris Club debt would otherwise mature in 2012-2020.

Part of the debt, 52.1%, will be repaid at par value, the other part with a fixed interest rate - to Britain, France, and the Netherlands - at market value.

Russia will pay $22.3 billion, including $21.3 billion as early payment, with $700 million as a planned installment on August 20, and $1 billion as a premium to Britain, Germany, France, and the Netherlands. Germany, Russia's largest club creditor, will receive $700 million of the premium.

The scheme was agreed with the Paris Club at talks June 15-16 and approved by Russian Prime Minister Mikhail Fradkov Thursday.

Storchak said the government was still to issue an additional resolution authorizing bilateral agreements with the creditors.

"These agreements will define specific amounts payable and payment timeframes, with the latter to be determined by creditor nations," he said.

Cadet said the multilateral protocol signed today changed Russia's status in the Paris Club, where it became a creditor.