No. E-62 "le:·: L~ .. :t"!'I"""-"""'--":' "'- , 66969 r This report is not to be published or \ I I . quoted as representing the Bank's views. i INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT EXTERNAL DEBT OF URUGUAY August 10, 1949 - @ ... RHURN 10 Economic Department GENERAl filtS Prepared by James J. Lynch ANU CORRlSPONUENCE POUTENTS stJl..n,1A.B.Y ••••••• ~ •••• , • t •••• , ...... ~ • , • " , ••••••• , •••••••• I ~ II I. Historical Review of External BorrowiD£ until 1230 1 - 2 II. Period of Default l2JQ.38; 1. Origins of D~fau1t~ •••• , ••••••••••••••••• ~. 2-5 20 Oourse of Default.,.~.~.~ •••••••••••••••••• 5 - 6 3. Final Adjustment of External Debt •••••••••• 6- 8 III.Lat@r Borrowing •••••....••••..• ~, ••••••••..•••.•• 9 IV. Outstanding External Debt, Interest and Amorti7.ation Charges .•••••• ,. ••••••••••••••••••• 9 - 12 Alfpep,dix I. External Debt. Interest Nld AmortizA,tion ReQuirements of Untgpay ••••••••• 1 - 3 II,. External Read,1u§tment Sinking Fund Della&: 'Bonds •.••• ,e •••• ~ ••••••••••••••••• 1 - :3 SUMMARY. The Republic of Uruguay first became a borrower in the international capi tal market in 1864 ,-,hen i t issued a one million pound loan in London for the conversion of internal debt. Further loans were issned in London through 1890 by which time J;.17.5 million ,'las outstanding. :Both interest and amortisation \-,ere suspended during this period from time to time (first in 1876), and debt adjustment programs were worked out resulting in rein- statement of interest and amortization payments, usually on a somet"hat lot"er basis. In 1891 the outstanding debt was consolidated into one ~~% loan. Further borrowing in London, and some in Pari S t took place from then and, until the outbreak of World War I at which time the external debt had reach- ed ~24.6 million. Uruguayan financing shifted to the U. S. market in 1915 and bet""een that year and 1930, $68 million of dollar bonds were issued, bearing coupons between 5% and 8%. The proceeds of the issues were used mainly to acquire a railway; promote agriculture; pay and refund certain indebtedness; and to construct sanit~y works, ports, roads and other public works and utility projects. All interest payments were met consistently from 1891 through 1932, but sinking fund p~ents "Tere partly suspended 1915-1920 and again 1923-24. The world crisis of the early 1930s once more brought Uruguay'S foreign debt into default. As a result of a sharp decline in e~orts and the complete stoppage of incoming foreign oapital, sinking fund payments on the external debts were suspended from January 1932 and July 1933. From this latter date interest on the e~ternal debt was made payable only in pesos, the peso equivalent being computed at ~ of exchange. Due to the II. depreciation of the peso, the result to the bondholdem \'Tas a 40% reduction in interest. In 1937 Urugu~ recognised the advisability of placing its financial house in order and offered the bondholders a permanent debt adjustment ~lan ':lhich consisted of an exchange of old bonds on a par for par basis for ne", bonds and a reduction of the old interest coupons from 5-8~ to 3...1/2 ,... 4...5/16%. There was practically no external long-term bOrrO\"ing by Uruguay during the 'thirties. In 1942 and 1943 t U:ruguay borrowed from the E:xnort... Import Bank of the U. S. Government an authorized amou~t of $43.7 million, of which $29.2 million was either cancelled or expired, resulting in a net borrowing from the Export-Import Bank of $14.5 million. These funds "'are mainly for hydro-electric development. The present outstanding external debt of Uruguay is estimated at $131 million on which interest and amortization payments total $7 million per year. Of that amount $3.6 million is p~able in U. S. dollars ana. $302 million in pounds sterling. The dollar p~nts amount to 7.2~ of the 1948 exports to the United States and total service payments to 3 0 8% of the total exports of Uruguay in that year. EXTEltNAL DEBTi RElCOIID OF URUGUAY. t. Historical Revie,., of Externa.l Borro'lfring until 1210 • The Republic of Uruguay first became a borrower in international capital markets in 1864 when it issued in London a ~l million loan at 60 for the conversion of internal debts. In 1871 a ne'!.', loan of .3.5 m11Hon, issued at 72, was obtained in London to consolidate the internal debt and to convert the bonds of 1864. Service on th~ 1871 loan was suspended in 187~; in 1878 "interest bonds" amounting to ~37lt520, bearing inter~st at 1-1/4%, were issued to fund the four unpaid coupons. Simultaneously, interest on the loan of 1871 was reduced from 6% to 2~1/2%t to be resumed at 6~ in five yearso The terms of the arrangement of 1878 were met in full through 1890. During this period the Government borrowed abroad a total of ~17.4 million, of which ~3.47 million was used to convert, par for par, old 6% issues into 5% bonds and ~ll million to fund the internal debt. In 1891 service was again suspended and a new agreement "Tas reached in accordance "1i th ,·,hlch the outs~anding foreign debt of ~17.5 million (including interest arrear~ of 1625,572) was converted into a new ~1/2% Consolidated Debt due 1999, totall- ing .18.1 million, with repayment premiums ranging from 5~ to 15%. From 1891 to the outbreak of World War I the external debt of Urugu.ay increa.sed from 78.6 million pesos (J'.15.9 million) to 121.5 million pesos (J'.24~6 million) and reached 87% of the total public debt. The external debt consisted mainly of sterling issues held in England ~~th some French franc bonds held in France. All service was consistently met until 1915 when, through an agreement with the British bondholders, all sinking fun9- payments were suspended. In accordance with agreements reached in 1916, this suspension wa.s continued until one year after the close of World War I. - 2 - With regard to the 3~1/2% Oonsolidated Debt of 1891. however, it was stipu- lated that, if the customs revenue (45% of which had bee~ pledged as security for the loan) should excee~ 17 million pesos in any year, the excess, up to 1% of the outstanding debt, should be applied to the payment of the suspended sinking fund. Payments of the sinking fund were resumed in 1921 and 1922. An additional debt adjustment wae made in 1925. After 1914, Uruguay~ financing shifted to the Vnit~d States' market and, between 1915 and 1930, dollar bonds totalling $67.757,000 ,,!ere issued at an ayer~e price of 96 with interest rates from 5% to 8%0, Proceeds of the $56t586~000 Republic issues vTere for acquiring a. rail't'lay, promoting agriculture, paying and refunding certain indebtednesses, constructing san~tar~ works, ports, railways, roads and other public "rorks, "'h~le $11,171,000 Montevideo bonds v'ere issued ;for public u.tility ",orks, reclaim- ing land, and for highway and street construction. II. Period of Default 1230~1938 1. Origins9f Default Interest and GJlll rtization payments "'ere met by Uruguay from the final debt adjustment on the 3-1/2% loan in 1925 throui:~h 1931. :But the ~:Torld.-'.'!ide economic crisis and the sharp decline in prices after 1929 had. a most serious effect on the economic and financial position of Urul'!'Uay, Total 6X"DOrts and imports comoined decreased from $184 million to $58 million, cx~orts of livestock produ.cts and wool alone, the bulk of Uruguay's exports, declining by 71% from $77 million in 1929 to $23 million in 1932. Imports "rere at the same tiDe greatly reduced, but did not drop as sharply as eXDorts in 1931 and 1932. - :3- ~li th the fall in world trade and the almost complete disappearance of incoming foreign capital, an acute situation developed, although it lasted a few years before the service of the foreign debt was affected. The Uruguayan peso depreciated from a gold par of $1.03 in 1929 to 34 cents in 1931. Exchange control was introduced in 1931, and a moratorium declared on current commercial liabilities. By the end of 1933. the neso had recovered to 75 cents. On July 15, 1932, new legislation was enacted extending the period for liquidation of commercial liabilities in foreign exchange to the end of 1933. In addition, an Autonomous .~ortization Bureau was created to fund foreign exchange liabilities arising out of commercial transactions. This bureau was authorized to issue ( up to an equivalent of 15 million gold pesos) bonds in Uruguayan gold pesos or foreign currencies. Bonds '-lere to be anplied exclusively to the settlement of commercial liabilities in foreign currencies outstanding July 15. 1932. as defined by the administrative board. Sinking fund paYiIlents on the total Uruguayan external debt ',1ere suspended by an act of January 20, 1932, but interest nayments \lrere maintained until JulY ), 1933. \'Jhen a law ,,'las passed susY)ending full interest payments on the external debt. The la'll !?rovided that the interest on external bonds 1tlould be den09i ted in neBOS in l·Iontevideo. at par of exchange. Due to the depreCiation of the peso, bondholders 1,,,ho accepted this had transferred only a!)1Jro::d.ma tely 601'; of the amo'lmt of their coupon. About 55% of the 1932 total National debt of 257 million pesos, - 4 - equivalent to approximately U.S. $200 million,1:/ WliS external, the balance consisting of internal debt and two loans qlassified as "international,!! whioh were in effect internal obligations payable in pesos. The public debt had increased by 49% since the end of 1920, largely due to an internal debt in- crease from 43 million pesos to III million pesos in the 12 years. The external debt was only 12% larger than at the end of 1920 and was less than the amount outstanding at the end of 1926, evidence of the growing financial internal strength of the country. Of the external debt of approximately $110 million, a substantial part was domestioally owned. Up to the period of major default in 1932-33, a con- siderable portion of the external debt of Uruguay had been repatriated. Domes- tic banks held, as of December 31, 1932, external bonds of the Government equivalent to 37 million pesos, more than one-fourth of the external debt out- standing at that date. Taking into account the repurchase of external bonds by individuals and institutions other than banks, the amount of Uruguayan external debt actually held abroad in 1932 was probably less than $80 million. The external bonds held by the local banks at that time consisted of ~3,934,000, 58 million French francs and U.S. $9,700,000. At the time of default the external debt of Uruguay consisted of five loans payable in pounds sterling, two bond issues stated in sterling, francs and pesos, and four issues of dollar bonds. Three of the sterling issues were secured by pledge of oustoms receipts, and the other two by mortgages on governmental railways. One of the multiple ----------.........---_.------.....----..--_...-._---_. --...,- !/ Computed by converting the internal and "international" debt at the exchange rate prevailing at the end of 1932 and converting the external debt at par. From the Institute of International Finance publication No. 64, Republic of Uruguay, p. 14. - 5- currenoy issues was secured by a pledge of custom revenues and one was unse- cured. The 5% dollar bond of 1915 was secured by a mortgage on the government railway but the other three dollar issues were unseoured. In addition to the ~~ion~l Government issues, obligations of the City of Montevideo were also outstanding. The debt of this munioipality on December 31, 1932 amounted to 55 million Uruguayan pesos, of which 42 million repre- sented internal obligations and 13 million external obligations. The latter oonsisted of ~10.4 million U.S. dollar bonds, and h 0.6 million sterling bonds. The ~~~~~or~gn deb! in 1932 thus amounted to 154 million pesos or apprOXimately $123 million, of whioh bonds for $90 million, at most, were foreign owned. 2. - Course of.. Default ~- The Council of the Corporation of Foreign Bondholders of Great Britain protested against the law of July 3, 1933 and,for the ~ consolidated debt, obtained a future exemption from it; the Council also obtained a provision for a 15 months scrip, redeemable the first of Feb4~ary 1935, for the unpaid bal- ance due on the coupons of November 1, 1933. In the case of the other loans, the Government agreed that interest payments in foreign currencies up to ~ on the principal should be guaranteed. The Republio's dollar bonds were treated in a similar way. In 1933 and 193~ the coupons were paid at the rate of 60 to 7fY/, of the amount owing, and subsequent coupons through 1937 were paid at a flat rate of ~ per annum in full payment. On the t1ontevideo dollar bonds, interest default occurred in 1932. Conversion of munioipal external bonds into peso bonds was authorized in June 1935 but conversion was not compulsory for holders outside of Uruguay. Dollar - 6 - bonds in the amount of $6,415,000 were converted into internal peso bonds. On August 1, 1938 holders of the outstanding $3,986,500 Montevideo bonds were offered new conversion bonds of Uruguay (see debt adjustment plan discussed later in this report). Because of the large internal holdings of external bonds, the Goverr~ent was able to reduoe its fixed contractual (interest and amortization) payments in foreign exchange by authorizing, in January 1935, the requisition of all Uruguayan foreign bonds held in the country (exportation of such bonds had been prohibited since June 18, 1931)~ Certificates Were issued to owners of the requisitioned bonds, and payment of coupons attached to such certificates was thereafter made only in Uruguayan currency. In September 1938 the certi- ficates were exchanged for purely internal 5% bonds. In February 1937 a cCDMersion took place of U~guayls internal debt, on which sinking fund payments had been suspended since November 1932. A Presi- dential decree ordered the redemption of all outstanding 6% or 6i% internal bonds of Uruguay and all ~ bonds of the Banco Hipotecario del Uruguay, unless exchanged for equal amounts of new 5% bonds with cash bonus ranging from 1 to 2%. The offer expired March 1937. On April 1, 1937, it was reported that 99.8~ of the ~ and 6i% loans had been converted. 3. Einal Adjustment of ~xte£E!!-~ ~~onal~Dq~lar Bond Exchange Offer: On September 20, 1937 an offerll was made to the dollar bond holders of external 5's of 1915 due 1952, 25-year sinking fund 8's of 1921 to 1946, external sinking fund 6's of 1926 to 1960, and external sinking fund 6's of 1930 to 1964 to exchange their bonds, on a par for par basis, for new readjustment bonds as follows: ---------------.--------.-------- ------.--~---------.-.------------ 11 Endorsed by the Foreign Bondholders Protective Council Incorporated. - 7 - .- Bonds Old .~ ,.....,.._ _-:N;.;.;e;:.:w~Readjustment BQag,;;;..s_ _P _ _ - 1938-39 1940-43 From Amounts Interest (incl.) (incl.) 1944 Outstanding % Int. S.F. Int. S.F. Int. S.F. Due ~ % % % ~--- % $ 1,248,000 5 3-1/2 1/2 3-1/2 1 3-1/2 1 1984 44,839,000 6 3-3/4 1/2 4 1 4-1/8 1 1979 6,860,500 8 4 1/2 4-1/4 1 4.-,1/2 1 1978 Bondholders assenting to this plan were assured against any future bond issue offering more favorable protection than that granted on the bonds issued under this debt adjustment plan.lI At the end of 1948 holders of 97% of the bonds involved had accepted the offer. Q!ty 0fM2!!~!i~e2.J2g!lar Bond,Excqange Offe!:: On August 1, 1938 an offer was made to holders of City of Montevideo external bonds, on a par for par basis, as follows; Old Bonds -~-........ ___..~!:!.Adjustment Bonds Amount Interest Int. % From Qq~standing % _ ....__ 1938 79. 1939-~31942, J2Y! $2,132,400 6 3-3/4 4 4-1/8 1979 3,112,200 7 3-7/8 4-1/8 4-5/16 1978 All unpaid coupons of the old 6% bonds maturing from November 1932 to November 1937 were paid at the rate of 3-1/2% annually, as follows: $100 in like con- version bonds, $87.50 in oonvertible scrip and $5 in cash; all unpaid coupons of the old 7% bonds maturing from June 1932 to December 1937 were paid at the rate of 3-1/2% annually, as follows: $200 in similar conversion bonds and $10 in cash. By December 31, 1948 it is estimated that holders of 98% of the bonds had assented to the oonversion offer. §ter1ipg and F!!noh ~ran2 Loan Offe~: After lengthy negotiations with the Council of the Corporation of Foreign Bondholders, a debt adjustment plan ----------.------~----- 11 A direct obligation of the Republic of Uruguay, which covenants that if it shall hereafter secure any debt by specific lien or charge upon any of its assets or reVenues the readjustment bondiJ shall share in SllCn lien or charge equally and ratably with such debt. For details, see Appendix II. - 8- was recommended for aeceptance to the British bondholders. Uruguay made the offer in 1939 to both the holders of National sterling and French franc loans and the City of Montevida-J sterling loan as follows: Cl.) conversion par for par, (2) reduction of interest from 5% and ~ to 3-1/2% per annum; (3) estab- lishment of a 1% tci 1-1/2% siriking fUnd, and, for mest lesns, (~) a cash bonus of 5% for those who assented to the plan. Details of the plan were: Old B~nds - --X~m-o-un~t--~~~~------- Interest Q~tstanding Sterling issues: --r-- 12,819,260 3-l/2 i s, '91 3-1/2% 1999 164,420 5' a, 196 3-1/2 1943 823,840 5' a, *14 3-1/2 1...1/2 1978 472,000 5 1 s; 119 3-1/2 1-1/2 1976 Amortization Interest ~~19:----40~~{J "'i944 -Due Frenoh loans: -r- % %. % Fos.97,153,000 5... s , i05 1 3~1/2 1/2 1 1-1/2 1979 21,464,000 51 $, '09 3-1/2 1/2 1 1~1/2 1979 !!!~~~ JI.mortization % --% 640,478 3~1/2 :3 Redemption of assented bonds was to be bi purchases on the market, by tender at or below par, or by drawing at par. Holders of all the above bonds, except the 3~1/2Is of 1891, were to be paid a cash bonus of 5% in five equal yearly installments. In addition, the Uruguayan Government assumed all respon- sibi1ity for the City of Montevideo loan. Since the Council approved the plan, it is likely that practically all of the bondholders have accepted the new low coupon, long matUrity bonds although there are no actual figures on the total number who accepted. The time for acceptanoe, Which under the original debt adjustment plan was to expire December 31, 1940, has been extended ever1 year since that time through December 31, 1948~ - 9 - III. ~a~3r Borrowing There was no private long-term financing by Uruguay in the United states after the early financing discussed above. However, loans have been obtained from the Export-Import Bank. The amount authorized was $43.7 million, of which $32.2 million was authorized in 1942 and 1943. However, $29.2 million has either been canoelled or has expired, leaving $14.5 million, of which a small amount of $300,000 has not yet been drawn. As of June 30, 1949 the principal amount outstanding on Export-Import Bank loans Was $1.3.6 million. These funds were used mainly for hydro-electric development, a small amount for a printing press and the rest for public works projects. Other small gov- ernmental credits have also been contracted from the U.S. raising the total oommitment to $15.9 million. IV. ~anding Ex~ern~l Debt, +ntere~~ Amortiz~tion C~a~ The outstanding external debt of Uruguay as of January 1949, has been esti- mated at U.S. $131 million, on which interest and amortization payments total $7 million. The debt is distributed as follows: Debt Outstanding 1949 Interest and Amortization .!...:!~uary 19'*9_L-_ _ _ ~;ymen!!§ : : % : : % : As % of dollar : Distri- : : Distri- :~!!:.!. total e!.E2.!::8L2f ..t!mount: But!on ; ~E!!2.::!!!t: bqt:ion .. : 1237 :193§ :194-8_ ---;-(amounts in thpusands) g.s.Dolla::! Dollar Bonds :45,697: 35.0 2,722 39.6 · . U.S. Intergovernment Utilized :15,294: 11.7 884 12.9 Unutilized · 579' ~ _ 36 -.Jh:i e",,_ : Total I~Dollars · . :15,873: :61,570: 12.1 47.1 920 .3,642 13.4 5.3.0 §lerling.(Totall : : In Sterling :17,150: 802 In Dollars :29,072: . ~2.9 " 2,220 6,872 .JIL.Q 100.0 , . 12.4'l2.5'378 Grand Total (in dollars)1)0,642 100.0 - 10- As shown above interest and amortization payments of $6.9 million amount to only 3.8% of the 1948 Uruguayan exports with the dollar charges of $3.6 million amounting to 7.2% of the exports of the country to the U. S. While both of these percentages indicate a relatively light debt burden in relation to exports, it is interesting to note that in relation to 1938 the present dollar interest and amortization payments would have been 16e%, reflecting the very small amount of exports to the United States of only $2.2 million in that year. A more favorable export year, 1937, shows this percentage as 47% with total charges equalling 12.4% of total e:tports. Of the total dollar bonds with an outstanding par value as of December 31, 1948 of $45.7 million, $13.5 million are estimated owned in the U.S. The remainder is either held in Uruguay or in other countries. Since a portion of the dollar bonds are owned in Uruguay,ll the outflow of dollars from that country will be materially under the maximum payments due as set forth in the above table. No ownership data are available on the amount of sterling issues held but it is believed that scm.) of theme are also held in Uruguay. It is, therefore, apparent that the actual foreign exohange requirements to meet public external debt service payments are likely to be substantially below that shown above. The balance of payments for 1945 through 1947 show about .annual the equivalent of $6 million as/interest ($4 million) and amortization C~2 million) payments. The external debt service is largely met from the profit accruing to the Government out of the wide spread between the buying and selling rates for foreign currencies. The official buying rate of the B8nk of the Republic is ----~----------------------------------------- 11 It is known that the aank of the Uruguayan Republic held $8.2 million of these bonds as of December 31, 1948. - 11 - 1. 5190 pesos per dollar and the "controlled selling rate!! is 1.8988 pesos per dollar, giving a spread of 0.3798 pesos per dollar or 25% of the buying rate. Of this, the Bank of the Republic is allowed to keep 1-1/2%, the balance of 23-1/2% accruing to the Government. Since the Bank or the Republic is a Gov- ernment bank and 80% of its total profits are allocated to the Gover~~ent, nearly the whole of the exchange profit actually goes to the State. According to legal provisions, the exchange profits are to be allocated first to the servicing of the foreign debt and, secondly, to subsidizing the importation of newsprint. The remainder is allocated to general budgetary needs. Exchange profits over an eight-year period, 1940-47, accruing directly to the Government (23-1/2%) have amounted to 92.9 million pesos, equivalent to $49 million. This has been almost sufficient to meet external interest and amortization charges. Total service pa~ents are expected to increase to a high of $7.7 million in 1951 and gradually deoline to $5.8 million by 1971, dropping off sharply thereafter to $).2 million in 197), as follows: - 12- External Debt Interest and Amortization Re uirements of Urn In thousands of dollars GrAnd Total Total Interest & Amortization Interest Amorti~atiou 1949 i30~642 4~911 6~872 1950 128,471 4,836 6~895 1951 126,199 4,744 7~703 1952 123,012 4,621 7.637 1953 119,761 4,497 7~570 1954 116~432 4~373 7~527 1955 113,017 41240 7~485 1956 109,490 4,107 7,442 1957 105~860 3,967 7,399 1958 101,121 3~820 7~345 1959 98~274 3~676 7~133 1960 94~476 3,528 7~096 1961 90.548 3,371 7~058 1962 86~273 3,214 6~891 1963 82~414 3~055 6~854 1964 78~19a 2~891 6~693 1965 73~955 2,719 6.223 1966 70~030 2~573 5~823 1967 66~249 2,4'28 5.823 1968 62~338 2~274 5:823 1969 58~256 2~113 5;823 1970 54.796 1~9?9 5,823 1971 49~582 1~??0 5,823 1972 44,871 1~588 4~672 1973 41,415 1,450 3,208 APPENDIX I Exterr.al Debt, Interos_~and Amortization Requirements of Uru,guay (In thousands of dollars) U.5 p~government Debt Dollar Bonds Reguirements on Amounts Outstanding 12l~+8 Total Total Interest & Interest & Outstanding Amortization Interest Amortization Outstanding Amortization Interest Amortization 1949 45.697 819 1,903 2,722 15,294 308 576 884 1950 44,672 862 1,860 2,722 14.986 308 56'7 875 1951 43,596 906 1,816 2,722 14,679 1~107 549 1~656 1952 42,46) 954 1,768 2,722 13,572 1~107 508 1,615 1953 41,270 1,003 1~719 2,722 12,465 1,107 467 1~574 19.54 40,016 1,.055 1~667 2,722 11~357 1~107 425 1~532 1955 38,696 1,110 1,612 2~722 10,250 1~107 384 1~491 1956 37,308 1~168 1~554 2~_722 9,143 1~107 343 1~450 1957 35,850 1,229 1~493 2~722 8:035 1~107 301 1~408 1958 33,.314 1,293 1~429 2~722 6~928 1,095 260 1:355 1959 32,697 1,)60 1~362 2,722 5~834 924 220 1~144 1960 30,996 1~431 1~291 2,722 4~910 924 184 1~108 1961 29~209 1~506 1,216 2~ 722 3~986 924 147 I~071 1962 26,.5192 1,584 1,138 2~ 722 3,.062 924 III 1,035 1963 25~J46 1,.666 1,056 2,722 2,139 924 75 999 1964 23,263 1,753 969 2,722 1,215 800 39 839 1965 21,073 1,847 875 2,722 415 363 '7 370 1966 18,765 1,941 781 2~722 511/ 1967 16,340 2~042 680 2,722 1968 13,786 2~148 574 2~722 1969 11~102 2~260 462 2~722 1970 9,088 2,378 344 2~722 1971 5,336 2~502 220 2~722 1972 2,179 1,481 90 1,571 1973 330 95 12 107 17 Export-Import Bank loan #333 ($51,488) now in default - no service requirements nrojected by Exnort-Import Ban~ 1. It is assumed that all non-assented dollar & sterling bonds will receive the same service as assented bonds. 2. It is assumed that the undisbursed amounts of Export-Import Bank loans will be utilized before expiration. (Continued on next page) - 2 - APPENDIX I (Cont.) External DaM;" Interest and Amortization RequiI'eIIleIlt~LQ:( lJruguay - (In thousands of dollars) U.S. Intergovernment Debt Requirements on Amounts Undisbursed 12/31/48 Total Dollar Debt Total Total Interest & Interest & Outst'anding ~~mortization Interest Amortization Outs tending Amortization Interest Amortization 1949 579 24 12 36 61~570 1:151 2~.,491 3~642 1950 555 47 21 68 60~213 1~217 2~448 3~665 1:951 508 76 19 95 58~783 2:089 2~384 4~,473 1952 431 53 17 70 56~466 2,114 2~293 4~407 1953 318 29 15 44 54~113 2~139 2,201 4~J40 1954 349 29 14 43 51,722 2~191 2~106 4~297 1955 320 29 13 42 49~266 2~246 2~O{)9 4~255 1956 291 29 11 40 46~742 2~J04 1~908 4~.212 1957 262 29 10 39 44~.l47 2~365 1:,804 4~I69 1958 233 29 9 38 40:475 2~417 1~698 4:115 1959 204 29 8 37 38~735 2~313 1,590 3~903' 1960 175 29 7 36 36,081 2,384 1,,482 3~866 1961 146 29 6 35 )3:341 2,459 1~369 3,828 1962 116 29 4 33 30:170 2.537 1,253 3;790 1963 87 29 3 32 27~572 2;619 1~134 3~753 1964 58 29 2 31 24~536 2~582 1,010 3:592 196.5 29 29 1 30 21 t 517 2•.239 883 3~122 1966 18,.816 1~941 781 2.722 1967 16:340 2,042 680 2~722 1968 13,786 2~148 574 2,722 1969 11~102 2~260 462 2,722 1970 9~088 2~378 344 2,722 1971 5~336 2~502 220 2~,722 1972 2,179 1.481 90 1,571 1973 330 95 12 107 (Continued on next page) - 3- APFElIDIX I (Cont~) External Debt. Illterest and Amortizat;on Requirements of Urup;uay (In thousands of dollars) Sterling Bonds (in sterling) Sterling Bonds ExPressed in Dollars Total Total Interest & Interest & outstanding Amortization Interest Amortization Outstanding Amortization Interest Amortization 1949 17,150 201 601 802 69:072 810 2~420 3~230 1950 16~948 209 593 802 68~258 842 2.388 3~230 1951 16~739 216 586 802 67~416 870 2~360 3.230 1952 16,523 224 578 802 66~546 902 2~328 3~230 1953 16,300 232 570 802 65~648 934 2~296 3~230 1954 16~O67 239 563 802 64~710 963 2~26? 3~230 1955 15~829 248 554 802 63~751 999 2~231 3~230 1956 15~580 256 546 802 62~ 748 1~031 2~199 3~230 1957 15,323 265 537 802 61~713 1~067 2~163 }~230 1958 15~O58 275 527 802 60~646 1~108 2~122 3~230 1959 14~783 284 518 802 59~539 1~144 2~086 3;230 1960 14~.499 294 508 802 58~395 1~184 2~O46 3~2JO 1961 14~204 305 497 802 57~207 1~228 2~002 3~230 1962 13,930 283 487 770 56, 103 1~140 1,961 3~101 1963 13,617 29) 477 770 54,842 1,180 1.921 3.101 1964 13~324 30} 467 770 53~662 1;220 1~881 3:101 1965 13~020 314 456 770 52~438 1;265 1~836 3~.lOl 1966 12~ 716 325 445 770 51~214 1~309 1~792 3;101 1967 12,392 336 434 770 49:909 1~353 1.748 3,101 1968 12~O55 348 422 770 48~552 1~401 1~700 3,101 1969 11,708 360 410 770 47~154 1~450 1~651 3,101 1970 11~349 364 406 770 45~ 708 1,466 1~635 3~101 1971 10~986 385 385 770 44~246 1;551 1~550 3~101 1972 10,600 398 372 770 42~692 1~603 1~498 3~101 1973 10,201 413 357 770 41,085 1,663 1.438 3.101 APPENDIX II External ReAdi~§:ment~nkin~ Fy.nd DoLar_:Bo'ASi_ (S & P RA!l'lltG *») ~l/?i' due Feb. I. 1228 j • Authorized ••••••••••••••• $6~e~8~,OO Issned ••••••••••• ~ •••••••• 6.,58,,00 Outstanding (l~ 4, 1949).. 5~003~500 Retired by S.F. ••••••••••• 1,555,000 4-1/2s, due May 1. 1279 Authorized •••••••• ~ .•.•••• $44~8j9~000 Issued ••••• J •••••••••••••• 44,839,000 Outstanding lMay 10, 1949), 34,238,500 Retired by S.F •••••••••••• 10,000.500 3-1/2,9, g,ue Jan. 1, 1984. Authorized •••••••••••••..• $ 1t248~000 I. sensd ••• ,................ 884,000 Outstand.ing (r'!ay 4, 1949).. 583~OOO Retired by S.F. ••••••••••• 301,000 Note - As of Dec. 31, 1944, $330,000 of the outstanding ~1/2s 1978, and $8,185,000 of the 4-1/2s 1979 were held by the Bank of the Republic. Purnmse of Issue - These bonds were issued, par for par, in e~ ohange for the old dollar bonds of the Republic of Uruguay. in accordance with the provisions of the readjustment plan approved by ~w ot July 15, 1937. Readjustment Issued in Bond~ Exchane.5! for 4s - 4-1/2s, 1978 ---.------- Ext. S.F. Ss, 1946 3-3/48 - 4-1/8s. 1979 ------- Ext. S.F. 6s, 1960 and . 1964 3-1/28. 1984 ---~-----------~ Ext. Gold 5s, 1915 §eouri,ty - A direot obligation of the l\.e:public of Uruguay 1 which covenants that if it shall hereafter secure any debt by specific lien or charge upon any of its assets or revenues the readjustment bonds shall share in such lien or charge equally apd ratably \·r1 th such other debt; but the foregoing shall not be constrUed as applying to any mortgage which the Republic may create upon any works of industrial or public utility, hereafter purchased or authorized by the Republic, as security for bonds or other obligations which the aepubllc may issue for the pur- chase or construction of said ~,·,orks, nor as ap:plying to any local tax lJ Source: Standard & Poor's Corp. records. - 2 - ~lhieh may be ereated.' in order to furni sh funds for the constru.ction of any roads, railroads, briugas Ol' pu:li~ utilitios. In case of default in tlle payment of pl'i nei pal , interE;st or si::>id::tg fund. the bonds shall thereafter be entitled to payment of samee, ",h", secu.ri ty f and the benef1 t of all othel' p:..'ovi sions of the bone. con';::a~';; rele.ting '~o the bonds in exc.r..ange for which the Readjustment bonds a"'6 issued. As l'egards the other external loans of the Republic outstanding :In pounds sterling and French francs, the Republic declares that the ) ... 1/2~ Sterling LOaJ:l., originally iSS"il.ed in 1891 in connection \,Tith the readjust- ment of o'i;her outstanding obliga.tions, "'ill continue to recei7e service at the ra~~e provided in the bonds. In the even', that any of the other enernal loans no't'1 outstanding i!l pounds stel~1ing and. French francs, ,.,hieh are loans originally bearing interest at 5% per anrr~, should receiVE; at any time treatment more favorable ,rlth respect to their service the.nis offered through the present offer to the outs'i;a:llding 5~ dollal' bonds, all the readjustment bonds ~hall have Ghe right to the proportionate increases in service. In addition. if any other privilege which the readjUs~ent bonds do not not" enjoy shall in the futUre be accorded to the external loans outstanding in pounds sterling or F~ench francs in addition to those \'lhich said Loans now have the same privil~ges shall be accorded pari passu to the readjustment bonds. Offered (4s ~ ~1/2s, 1978) on Jano 1, 1938 to holders of ]L~t. S.F. Bs, 1946; (3~3/4s - 4-lj8s, 1979) on OC'G, 25. 1937 to holders of Ext. S.F. 68, 1960 and 1964; (3-1/2s, 1984) on Dec. 15, 1937 to helders of Ext. Gold 5s. 1915. External Oo,pyer!'i1on Sinking F'nnd Dol1flr Bonds (s & P RATllTG *13) Authorized ••.••••••••••••••.. $ 2~008~lOO I sS"lled ............ ., ... ., ........ . 1~986,800 Outstanding (i.fay 10. 1949) ••• 1,543,400 Retired by S.F ••••••••••••••• 443,400 Authorized ••••••••••••••••••• $ Z~855~400 Issued ••••..•••.•••••••••••.• 2.769,000 Outstanding (May 10, 1949) •••• 2,165,600 Retired by SoFa •••••••••••••• 603,400 Put;PQSP of laM" These bondr$ were issued par for par in exchange for the City of MonteVideo External Sinking Fund 6~ 1959. and 7s, 1952, and also in partial settlement of unpaid interest on the bonds in accordance with the -3- conversion plan approved by Law of January 20. 1938. Conversion Issued in Bonds Exchenge for 3-'3/4s - 4...l/8s, 1979 - - , - - - - Montevideo 6s, 1959 3-7/8$ - ~5/l6s, 1978 ---------------- Montevideo 7s, 1952 pemgi ty - A direct obligation of the Republic of Urugu.ay ,.,hich t cov(nants that if it shall hereafter secure any debt b,y specific lien or charge upon any of its assets or revenues the conversion bonds shall share in such lien or charge equally and ratably with such other debt; but the foregoing shall not be construed as applying to any mortgage \-'h1oh the Republic may create upon any ",orks of industrial or public utility there- after purchased or authorized b,y the RepubliC, as security for bonds or other obligations which the Republic may issu.e fOr the purchase or ?on- struction of said ,,,orks, nor as a.pplying to any local tax which may be created in order to furnish funds for the construction of any roads, rail- roads, bridges or public utilities. In Case of default i~ t~e payment of principal, interest or sinking fund. the bonds shall thereafter be entitled to payment of service a.t the rate provided for the bonds in exebange for which the conversion bonds are issued. As regards theS% Sterling Loan of 1889 of the City of Montevideo and the three issues of Externallteadjustment Sinking Fund Dollar :Sonds of 1937 of the Bepubllc, the Republic agrees that if (1) such 5~ Loan of the City should be accorded by the aepubllc more favorable terms than the holders of the Rep!1b11c' f,! 3-1/2% Readjustment :Bonds of 1937 are no,", entitled to re- ceive, or (2) any of the three 1ssuss of the Readjustment Bonds of 1937 of the ltep!1b11c should be granted more fa.vorable terms than i$ at present pro- vided. therefor. then the conversion boUtts shall be enti tled pari paSS'll. to receive proportionately more favorable treatment. Offered (,"3/4s - 4-i/8s t 1979) on Aqgust 1, 19,8. to holders of City of MonteVideo Ext. S.F. 60, 1959; (~7/S - 4-5/16e, 1978) on August 1. 19'38, to holders of City of Montevideo Ext. S.F. 7st 1952. ,