EC-35 RIST RESTRICTED Public Disclosure Authorized

This report is restricted to use within the Bank.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized

THE PUBLIC EXTERNAL DEBT OF LUXEMBOURG Public Disclosure Authorized

April 15, 1954 Public Disclosure Authorized

Economic Staff Prepared by: Andrew C. Huang Reviewed by: Carel deBeaufort Table of Contents

Page

I. Debt Outstanding 1 II. Service Payments 2

Tables: S-1: Summary of External Public Debt of Luxembourg

A-1: External 1ablic Debt of Luxembourg

A-2: Estimated Contractual Interest and Amortization Payments on the External Public Debt of Luxembourg THE FUBLIC EXTERNAL DEBT OF lUXEMBOURG

I. Debt Outstanding

The long-term external debt of Luxembourg was reduced by the equivalent of $30,000 to about $18.4 million during 1953. About 58%, or $10.6 million, of the total represented the IBRD loan.l/ The development and the composition of the indebtedness during 1953 is summarised below: In US$1,000 equiv. (12/31/52) (12/31/53) 1) U.S. Dollar Debt a) Bonds 542 513 b) IBRD loan 10,210 9,840 c) MSA loan 3,000 3,000 Sub-total 13,752 13,3 2) Swiss Franc Bonds 4,293 4,192 3) Belgian Franc Debt - IBRD loan 801 772 4) Sterling Bonds 62 61 Grand total I, 90,

1) U.S. Dollar Debt

The U.S. dollar debt of Luxembourg was reduced by $399,000 to $13.4 million during 1953.

a) Bonds. The 3% 1947-71 Dollar Bonds of Luxembourg were reduced by about $29,000 to F51,000 in 1953. The service of these bonds, which are entirely held within the country, may be made at the option of the bondholders in local cur- rency at the current exchange rate.

b) IBRD loan. The dollar portion of the $12 million 2/ IBRD loan to Luxembourg for steel mill and railway equipment was reduced by $370,000 to about $9.8 million, of which about $580,000 was sold by the Bank. The loan matures in the period 1949-72 and carries interest at 3 1/4% plus 1% commission.

c) MSA loan. The amount of the $3 million MSA loan did not change during 1953. The loan is to mature between 1956 and 1983 and carries interest at 2 1/2% starting in 1952. Onder the loan agreement service payments of this loan may be postponed under adverse economic conditions by mutual consent of the U.S. and Luxembourg Governments.

2) Swiss Franc Bonds

The 4% 1948-83 Swiss franc loan was reduced by Sw fr 420,000 during 1953 to Sw fr 18 million ($4.2 million). Of this amount about Sw fr 17.6 million is being held internally and Sw fr 360,000 outside of Luxembourg. The loan contrac provides that service may be paid in local currency 'at the bondholders' option at the fixed rate of Sw fr 1 = Lux fr 10.14.

1/ The IBRD loan would represent about 77% of the total external debt of Luxembourg rf allowance were made for $4.6 million equivalent of loans in foreign currency w ich are held internally. 2/Of this amount about $238,000 was cancelled. - 2-

3) Belgian Franc Debt

The portion of the $12 million IBRD loan disbursed and repayable in Belgian currency was reduced by B fr 1.4 million to B fr 38.6 million (4772,000) including the equivalent of $389,000 sold to Luxembourg lenders.

4) Sterling bonds

The 3% sterling loan of 1947-71 was reduced to 121,700 ($61,000) during 1953 from E22,250. The loan, being held entirely within the country, is serviceable in local currency at the current exchange rate at the bondholders' option.

II. Service Payments

There is no record of default of any external obligation except during World War II when service on the external debt was suspended. Complete service was resumed in 1947 with full payment of all arrears.

Service payments of Luxembourg's foreign debt during 1954 and 1978 are given in detail in Table A-2. Payments for a few representative years are sum- marized below.

(expressed in thousands of US$)

Service Payments Debt out- By currency standing Amorti- Inter- T Swiss Belgian Year Jan.1 zation est Total US$ Sterl. francs francs

1954 18,378 511 698 1,209 905 4 242 58 1955 17,867 529 681 1,?10 904 .5 242 59 1965 11,169 818 16 1,232 926 5 242 59 1972 4,578 1,020 153 1,173 876 242 55 1973 3,558 292 120 412 170 242 - 1978 2,032 326 69 395 153 242 -

As indicated above, total service payments amount to the equivalent of about $1.2 million per year between 1954 and 1972; thereafter they decline to about $400,000 annually between 1973 and 1978. However, the amounts in foreign currencies actually required are about $300,000 per annum lower than the preceding estimates because, as previously mentioned, a substantial part of the debt is reported as being held in Luxembourg. Table S-1: LU)EMBOURG - SU-MARY OF EXT3RMTAL PUBLIC DEBT

Debt of the National Government

(Amounts expressed in thousands of U. S. dollars)

Debt outstanding Currency Dec. 31, 1953 Amount $

All currencies (all disbursed) 18is78 100.00

U.S. dollars 13,353 72.66 Publicly issued bonds 513 2.79 Privately placed debt 382 2.08 IBRD 9 ,458 51.46 U.S. Government 3,000 16.33

Swiss francs (Publicly issued bonds) 4,192 22.81

Pounds sterling (Publicly issued bonds) 61 0.33 Belpian francs 4.20 Privately placed debt 389 2.12 IBRD 383 2.08

IBRD - STATISTICS SECTION February 18, 1954 Table A-i; LUXEMOURG 4 EXTERNAL PUBLIC DIMT

Debt of the National Government

(In thousands) Pare 1 Debt outstanding Identification Dec. 31, 1953 In currency Expressed in of payment U.S. dollars

TOTAL EXTZRNAL PLELIC DEBT 18,378

U.S. DOLLAR DEBT $ 1353 13,353 Publicly issued bonds $552,400 Grand Duchy of Luxembourp-, Ext.3%, 1947-1971 $ 5132j 513 Privately placed debt U.S. dollar portion of $11,762,000 IBRD loan sold without IBRD guarantee to third parties 4 l/l4, 1947-1972 $ 382 2/ 382 IBRD loan U.S. dollar portion $11,762,000 IBRD loan to Luxembourg 4 1/4A 1947-1972 9,458 & 9,458 U.S. Government $3,000,000 ERP loan 2 112o, 1948-1983 $ 3,000 3,000

SWISS FRANC DEBT S%1 frl7,976 4,192 Publicly issued bonds Sw fr 19,362,900 Grand Duchy of Luxembourg, External 4%, 1948-1983 Sw frl7,9762& 4,192

ST.z.LING DEBT & 22 61 Publicly issued bonds £ 23,475 Grand Duchy of Luxembourg, External 3%, 1947-1971 i 22 ;] 61

BELGIAY, '..-AIC DZBT 3fr 38,588 772 Privately placed debt Belgian franc portion of $11,762,000.IBRD loan sold without recourse to third parties 4 1/4% 1947-1972 Bfr 19,447 2/ 389 IBRD loan Belpian franc portion of $11,762,000 IBRD loan to Luxembourg 4 1/4I, 1947-1972 Bfr 19,141 2j 383

Exchange rates; Sw fr 1 = $0.2332); Z 1 = $2.80;.Bfr 1 = $0.02 Table A-1: LUXEMOURG - EXTERNAL PUBLIC DEBT (Cont.) Pape 2

1/ This entire amount outstanding is held internally.

2/ The status of this loan as of Dec. 31, 1953 was as follows:

Amount outstanding In currency *xpressed in of payment U.S. dollars

Total (All disbursed and still outstanding) 10,611,742 a/

U.S. dollars $ 9,840,000 9,840,000 Held by IMRD $ 9,259,000 9,259,000 S,)ld with IRDis suarantee $ 199,000 199,000 Sold without IBRDIs puarantee $ 382,000 382,000

Belaian francs Bfr 38,587,100 771,742 Held by IBRD Bfr 19,140,600 382,812 Sold without IBRDs cuarantee to Luxembourp holders Bfr 19t446,500 388,930

a/ The amount shown here differs from the IBRD dollar book value equivalent of $10,723,000 contractually due at this date because the Belmian francs were converted to U.S. dollars at the current rate,

] Of this amount Sw fr 17,614,200 is held internally and Sw fr 361,400 is held externally.

A/ Payable in Swiss francs or Luxembourg francs at Sw fr 1 = Lux.fr 10.14.

IBRD - STATISTICS SECTION February 12, 1954 Table A-?: LUXEMBOURG - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYMENTS ON THE EXTERNAL PUBLIC DEBT

Debt of the National Government

(Expressed in thousands of U.S. dollars) Pagg 1 Total debt Service Dpyments by currency TQtal U.-S.-dollar debt Debt out- Payments during year U.S. Swiss Pounds Belgiandrin year Year standing Amorti- In- Total dollars francs sterling francs Jan. 1 zation terest Jan. 1 zation legedt 1954 18,378 511 698 1,209 905 242 4 58 13,353 404 501 905 1955 17,867 529 681 1,210 904 242 5 59 12,949 417 487 904 1956 17,338 601 658 1,259 954 242 5 56 12532 485 469 954 1957 16,737 618 636 1,254 948 242 5 59 12,047 498 450 948 1958 16,119 636 610 1,246 942 242 4 58 11,49 512 430 942 1959 15,483 629 585 1,214 910 242 4 58 11,037 500 410 910 1960 14,854 650 559 1,209 904 242 4 59 10,537 516 388 904 1961 14,204 726 533 1,259 955 242 4 58 10t021 588 367 955 1962 13,478 748 505 1,253 948 242 4 59 933 6o4 344 948 1963 12,730 769 475 1,244 940 242 4 58 8t829 620 320 94o 1964 11,961 792 445 1,237 932 242 5 58 8,209 637 295 932 196.5 11,169 818 414 1,232 926 242 5 59 7,572 656 270 926 1966 10,351 896 380 1,276 970 242 5 59 6,916 728 242 970 1967 9,455 920 345 1,265 961 242 5 57 6,188 747 214 961 1968 8,535 945 309 1,254 951 242 4 57 5t441 765 186 951 1969 7,590 974 271 1,245 943 242 4 56 49676 788 155 943 1970 6,616 1,003 232 1,235 933 242 4 56 3t888 809 124 933 1971 5,613 1,035 195 1,230 928 242 4 56 3,079 834 94 928 1972 4,578 1,020 153 1,173 876 242 55 2,245 816 6o 876 1973 3,558 292 120 412 170 242 1,429 135 35 170 1974 3,266 298 110 408 166 242 129 135 31 166 1975 2,968 305 100 405 163 242 1,159 135 28 163 1976 2,663 312 90 402 160 242 1,024 135 25 160 1977 2351 319 79 398 156 242 889 135 21 1978 156 2,032 326 69 395 153 242 754 135 18 153 Table A-2i LUXEMBOURG - ESTIMATED CONTRACTUAL INTEREST AID AMORTIZATION PAYMENTS ON TIE EXTERIAL PUBLIC DEBT - Contd. Debt of the National Government

(Expressed in thousands of U.S. dollars) Page 2 Publicly issued dollar bonds Privately placed dollar debt U.S. dollar portion ______of_I3RD_loan_held_byBankc

Year Debt out- Payments durinp- year Debt out- Payments during year Debt out- Payments during year standing Amorti- Im" Total standing Amorti- In- Total standing Amorti- In- Total Jan. 1 zation terest Jan. 1 zation terest Jan. 1 zation terest 1954 513 22 15 37 382 382 9 391 9,458 - 402 402 1955 491 23 14 37 .9,458 394 398 792 1956 468 23 14 37 .9,064 40? 381 788 1957 445 24 13 37 8,657 420 364 784 1958 421 25 13 38 8,237 433 346 779 1959 396 25 12 37 .7,804 448 327 775 1960 371 26 11 37 7356 463 307 770 1961 345 27 10 37 .6,893 479 288 767 1962 318 28 10 38 6,1414 494 267 761 1963 290 28 9 37 5,920 510 246 756 1964 262 29 8 37 .5,410 526 224 750 1965 233 30 7 37 .4,884 544 202 746 1966 203 31 6 37 4,340 562 178 740 1967 172 32 5 37 3,778 580 154 734 1968 140 33 4 37 .3,198 598 130 728 1969 107 34 3 37 2,600 619 104 723 1970 73 35 2 37 .1,981 639 77 716 1971 38 38 1 39 1,342 661 51 712 1972 681 681 22 703 1973 1974 1975 1976 1977 1978 Table A,-2: LUXMBOURG - ESTIMATED COUTRACTUAL INTEREST AIN AMORTIZATION PAYMENTS OW THE EXTERIAL PUBLIC DEBT - Contd. Debt of the National Government

(Expressed in thousands of U.S. dollars) Page I U.S. Government loan Swiss franc debt Sterling debt Year Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- Il- Total standing Amorti- In- Total standing Amorti- In- Jan. 1 zation terest Jan. 1 zation terest Jan. 1 zation terest Total

1954 3,000 - 75 75 4,192 75 167 242 61 2 2 4 1955 3,000 - 75 75 4v117 78 164 242 59 3 2 5 1956 3,000 55 74 129 4,o39 81 161 242 56 3 2 5 1957 2,945 54 73 127 3,958 84 158 242 53 3 2 5 1958 2,891 54 71 125 3,874 87 155 242 50 3 1 4 1959 2,837 27 71 98 3,787 91 151 242 47 3 1 4 1960 2,810 27 70 97 3,696 94 148 242 44 3 1 4 1961 2,783 82 69 151 3,602 98 144 242 41 3 1 4 1962 2,701 82 67 149 3,504 102 140 242 38 3 1 4 1963 2,619 82 65 147 3,402 lo6 136 242 35 3 1 4 1964 2,537 82 63 145 3,Z96 110 132 242 32 4 1 5 1965 2,455 82 61 143 3,186 115 127 242 28 4 1 5 1966 2,373 135 58 193 3,071 119 123 242 24 4 1 5 1967 2,238 135 55 190 2,952 124 118 242 20 4 1 5 1968 2,103 134 52 186 2,828 129 113 242 16 4 11 4 1969 1,969 135 48 183 2,699 134 108 242 12 4 1 4 1970 1,834 135 45 180 2,565 140 102 242 8 4 4 1971 1,:699 135 42 177 2,425 145 97 242 4 4 1 4 1972 1,564 135 38 173 2,280 151 91 242 1973 1,429 135 -35 170 2,129 157 85 242 1974- 1,294 135 31 166 1,972 163 79 242 1975 1,159 135 28 163 1,809 170 72 242 1976 1,024 135 25 160 1,639 177 65 242 1977 889 135 21 156 1,462 184 58 242 1978 754 135 18 153 .1,278 191 51 242 Table A-2 LUXEMBOURG - ESTIMATED CONTRACTUAL INTEREST AND AMORTIZATION PAYNINTS ON TIE EXTERNAL PUBLIC DEBT - Contd. Debt of the National Government

(Expressed in thousands of U.S. dollars) Page 4 Total Belgian franc debt Privately placed Belgian franc portion Belgian franc debt of IBRD loan held by Bank Year Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- In Total standing Amorti- In- Total standing Amorti- In- Total Jan. 1 zation terest Jan. 1 zation terest Jan. 1 zation terest

1954 772 30 28 58 389 30 12 42 383 - 16 16 1955 742 31 28 59 359 31 12 43 383 - 16 16 1956 711 32 26 58 328 32 10 42 383 - 16 16 1957 679 33 26 59 296 33 10 43 383 - 16 16 1958 646 34 24 58 263 34 8 42 383 - 16 16 1959 612 35 23 58 229 35 7 42 383 - 16 16 1960 577 37 22 59 194 37 6 43 383 - 16 16 1961 54o 37 21 58 157 37 5 42 383 - 16 16 1962 503 39 20 59 120 39 4 43 383 - 16 16 1963 464 40 18 58 81 40 2 42 383 - 16 16 1964 424 41 17 58 41 41 1 42 383 - 16 16 1965 383 43 16 59 383 43 16 59 1966 340 45 14 59 340 45 14 59 1967 295 45 12 57 295 45 12 57 1968 250 47 10 57 250 47 10 57 1969 203 48 8 56 203 48 8 56 1970 155 50 6 56 155 50 6 56 1971 105 52 4 56 1972 105 52 4 56 53 53 2 55 53 53 2 55 1974 1975 1976 1977 1978