Exclusive - Cuba's debt deal: Easy terms, but severe penalties if late again
By Marc Frank and Leigh Thomas
HAVANA/PARIS (Reuters) - Paris Club creditor nations have forgiven $8.5 billion of Cuba's $11.1 billion debt and restructured payments on the remainder with easy terms but the deal imposes severe penalties if Cuba falls behind again, according to a copy of the accord seen by Reuters.
The French government announced the outlines of the accord on Saturday. The document seen by Reuters offers previously unreported details.
The Cuba Group, made up 14 of the 19 wealthy nations of the Paris Club, said the agreement was an important step in the Communist-run island's efforts to rejoin the international financial community and could lead to more Western credits and investment.
The deal covers official debt defaulted on through 1986, plus interest, service charges and penalties.
It calculates Cuba's total debt to Paris Club members at $11.1 billion, which is less than previously reported $15 billion largely because of the strong appreciation of the dollar against other currencies. All the loans were denominated in euros and other currencies.
Interest is forgiven through 2020, and after that is just 1.5 percent of the total debt still due.
Repayment is structured over 18 years and annual payments gradually increase from 1.6 percent of the $2.6 billion owed, total, or about $40 million, in 2016 to 8.9 percent in 2033.
However, if Cuba does not meet the payment schedule by Oct. 31 each year, it will be charged 9 percent interest until payment, plus late interest for that portion in arrears. Continued...