The umbrella of the grace period is a bad signal.
The present is a free summary of the information released by Dominican newspaper Diario Libre
The Dominican authorities requested an extension to start accommodations with the Club of Paris regarding the payment of the external debt of the Dominican Republic. The meeting for renegotiation of bilateral debt repayment was scheduled for march, and now it will take place on April. The experts of JP Morgan said that is a fact that the payment of the US$11-million due on 28 February for the PDI Brady Bond will not be made on time. They stress nevertheless that the Dominican Republic is entitled to a 15 days grace period.
According to Morgan, DR still has a considerable limitation on resources, giving rise to the theory that the Paris Club was putting a lot of Pressure over the Country to display its equal treatment with private investors. Morgan confirmed that the IMF recommended to DR to keep up to date in payments until it reaches an agreement with the Paris Club.
The postponement of accommodations until April, “further complicates the things”, because there is another payment in the amount of US$23.74 millions on the 06 bonds due on March 27 (with a 30 days grace period). Finally according to JP Morgan the late payments on 06 bonds would be used to negotiate with Paris Club. The goal is to postpone payments to private creditors, and odds are that private creditors will no receive more payments on 2004.
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