Franco Uccelli, who covers the Dominican Republic for the Bear Stearns brokerage firm, reports on the trip of a high-ranking Dominican delegation to Madrid this week to negotiate with the Spanish government a US$250-million bridge loan that he explains would be used to offset part of the US$400 million in external debt service obligations it must confront before year-end.<\/p>\n
He comments that if the loan is secured from Spain, it would demonstrate remarkable goodwill from one of the country’s most important bilateral lenders, but points out that the loan would not enable the country to comply with the Paris Club’s comparability of treatment principle, which must be applied by the DR as part of its efforts to cover its residual external financing gap for this year.<\/p>\n
Uccelli states that the Dominican government has announced that in addition to negotiating a bridge loan from Spain it will continue to pursue a restructuring of its commercial debt, making specific reference to the country’s global bonds.<\/p>\n
“Bottom line: We believe that successfully negotiating a US$250-million credit from Spain would not reduce the likelihood of the DR doing a debt restructuring with bondholders. Indeed, the opposite may be true if Spain chooses to use a bond restructuring as a quid pro quo to extend the DR the requested bridge loan.”<\/p>\n","protected":false},"excerpt":{"rendered":"
Franco Uccelli, who covers the Dominican Republic for the Bear Stearns brokerage firm, reports on the trip of a high-ranking Dominican delegation to Madrid this week to negotiate with the Spanish government a US$250-million bridge loan that he explains would be used to offset part of the US$400 million in external debt service obligations it … <\/p>\n