Costa Rica Signs Accord With Creditor Banks
SAN JOSE, Costa Rica (AP) _ Costa Rica and a group of U.S. banks signed an accord Saturday restructuring the Central American country’s $1.8 billion commercial debt.
The accord, which is expected to save Costa Rica $150 million a year, was signed by James Jardine of the Bank of America, and Eduardo Lizano of the Costa Rican Central Bank. Jardine acted as the representative of the creditor banks.
President Oscar Arias hailed the agreement as an historic event that removes one of the main obstacles to his country’s economic growth.
Eduardo Lizano, president of the Central Bank, said earlier that under the agreement, Costa Rica will repurchase 64 percent of its commercial debt at 16 cents on the dollar.
Costa Rica now will have until May 21 to pay $253 million to bring itself up to date in payments and repurchase the old debt.
Costa Rica was one of the earliest countries to reach agreement in principle on new financing packages under a U.S. plan unveiled in March 1989 by Treasury Secretary Nicholas Brady.
It focuses on enticing commercial banks to write off some of their loans to Third World nations or reduce the interest charged in return for guarantees that the remaining debt will be paid.