Franco Uccelli of Bear Stearns reports that a Dominican government mission led
\nby Technical Secretary to the Presidency Carlos Despradel left for France
\nyesterday to hold "informal meetings" with the Paris Club starting tomorrow. The
\nmission will be received by the government’s legal and financial advisors.
\nFormal meetings to discuss official debt relief concessions from the Paris Club
\nare still set to commence on 12 April.
\nUccelli speculates that the purpose of the current Paris-bound mission is to
\npresent to the Paris Club the country?s proposed strategy for dealing with its
\nlate (PDI) and upcoming (’06) bond payments. He says that the 15-day grace
\nperiod on the country?s late PDI payment expires at the end of this week, adding
\na sense of urgency to the decision-making process.
\nAlso according to Uccelli, past talks with Dominican senior-ranking officials
\nhave signaled that the government believes that staying current on its external
\ndebt obligations is their preferred course of action. Nevertheless, he says that
\nwith prospects of a market-debt restructuring looming, the government realizes
\nthat its bargaining position would be significantly improved if it were to stay
\ncurrent on its commitments, rather than defaulting on them.
\n?We believe that the official mission heading to Paris will propose making the
\nPDI payment as a way of buying time for the 12 April formal likely meetings,? he
\nwrites, adding, ?The March 27 coupon payment on DomRep ’06s will likely be
\ndelayed, but its 30-day grace period would afford the Dominican government the
\nopportunity to meet with the Paris Club before making any payment
\ndetermination.?
\nUccelli describes a tough ride ahead for the local economic climate. He writes:
\n?What is not clear to us at the moment is how amenable the Paris Club will be to
\nthe Dominican Republic making the PDI payment this week. The Paris Club
\nexpressed discontent when DomRep made good (albeit late) on a coupon payment on
\nits 2013 bond last month, and the Dominican government is now concerned about
\nfurther alienating the Paris Club at a time when it is seeking debt relief from
\nits bilateral creditors. With no payment assurances and much uncertainty at this
\npoint, it is going to be down to the wire for Dominican Republic once again.?<\/p>\n","protected":false},"excerpt":{"rendered":"
Franco Uccelli of Bear Stearns reports that a Dominican government mission led by Technical Secretary to the Presidency Carlos Despradel left for France yesterday to hold "informal meetings" with the Paris Club starting tomorrow. The mission will be received by the government’s legal and financial advisors. Formal meetings to discuss official debt relief concessions from … <\/p>\n