The Presidency of the Republic published Law No. 118-05 (dated 29 March 2005) that authorizes the Executive Branch to replace the sovereign bonds issued in 2001 and 2003 with others with better payment conditions, and more adjustment with the capacity to pay of Dominican government. The law also authorizes the Executive Branch to negotiate new expiration dates for these two placements, postponing their expiration to up to 10 years. It establishes that the payment of interest will be carried out every six months, and that the coupon payments of the new bonds cannot be more than that of the bonds that they replace. The payments will be consigned in the national budget. The law also authorizes the Executive Branch to negotiate with bondholders the capitalization of the interest on the new sovereign bonds during 2005-2007.
The law establishes that the yield of the new sovereign bonds that will replace the existing ones will be exempt from income taxes (Art. 306 of Law No. 11-92) and any other retention, commission or charge.