FIE yEC-4 CONFIDENTIAL Public Disclosure Authorized This report is limited to those members of the staff to whose work it directly relates.I

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized

PUBLIC EXTERNAL DEBT OF Public Disclosure Authorized

November 25, 1952

Economic Staff Prepared by: Andrew C. Huang Public Disclosure Authorized Reviewed by: James J. Lynch Table of Contents

Page

I. Debt Outstanding 1 II. Service Payments 2

Table A-1: External Public Debt of Luxembourg Table A-2: Estimated Contractual Amortization and Interest Payments on the External Public Debt of Luxembourg

(This report was prepared by Andrew C. Huang and reviewed by James J. Lynch.) PUBLIC EXTERNAL DEBT OF LUXE1BOURG

I. Debt Outstanding

As of December 31, 1951 Luxembourg's outstanding long-term public external debt was estimated at the equivalent of $19.3 million. Nearly 60% (or 11.4 mil- lion) of this amount was represented by the IBRD loan. The structure of the in- debtedness, detailed in Table A-1, is summarized below.

In units equiv. to US$1,000 1) U.S. Dollar Debt a) Bonds 552 b) IBRD loan 10,568 c) MSA loans 3,000 Sub-total 16U,120 2) Bonds 4,251 3) Debt IBRD loan 829 4) Sterling Bonds 66

Grand total 19,26 1) U.S. Dollar Debt

a) Bonds The25-year 3% dollar bonds of Luxembourg issued in 1947 are outstanding in the original amount of *52,000, Amortization began in June 1952. The loan contract stipulates that service may be made in local at the current exchange rate at the option of the bondholders.

b) IBRD loan The ,12 million IBrD loan to Luxembourg for the purchase of steel mills and railroad equipment, of which about $238,000 had been cancelled and about $246,000 already repaid as of December 1951, matures in the period 1949-72. The loan carries 3 1/4 interest plus 1% commission per year.

c) U.S. Government loan The 3 million MSA loan is repayable over a 35-year period with interest payments of 2 1/2% starting in 1952 and the repayment of principal begin- ning in 1956. The loan agreement provides that under adverse economic conditions service payments may be postponed by mutual consent of the U.S. and Luxembourg Governments.

2) Swiss Franc Bonds

The 4% 1948 Swiss franc loan was issued to convert a 5% Swiss loan of 1932. The principal outstanding amounts to Sw fr 18.6 million ($4.3 million); only Sw fr 380,000 ($87,000) are held outside the country. The contract provides that service may be paid in local currency, at the bondholders' option, at the fixed exchange rate of Sw fr 1 = Lux fr 10.14. -2-

3) Belgian Franc Debt

The debt represents the portion of the IBRD loan disbursed in Belgian currency. As of December 31, 1951 the amount outstanding was B fr 41.4 million, equivalent to $829,000.

4) Sterling Bonds

The 25-year sterling loan of 123,475 (265,730) was issued in 1947. It is now outTtnnding in t4c ori.in-irl 'mount -nt i-, anricebcl in local currency at the current exchange rate at the bondholders' option. The entire amount of the loan is reportedly held within the country.

II. Service Payments

There is no record of default on any public external obligations except during World Viar II when service on the external loans was suspended. Complete service was resumed in 197 and full payment was made on all arrears.

Service payments on the foreign debt of Luxembourg for selected years during 1952-76 are given in detail in Table A-2 and are summarized below.

Projected Total Service Payments on the Public External Debt of Luxembourg (expressed in thousands of U.S.$)

T o t a 1 D e b t Service payments by currency Debt out- Payments during year standing Amorti- Inter- Swiss Belg. Ster- Year Jan.1 zation est Total U.S.$ francs francs ling 4 1953 18,789 l92 717 1,209 907 237 61 1954 18,297 510 701 1,211 907 238 61 5 1955 17,787 527 681 1,208 904 238 61 5 1965 11,107 816 411 1,227 926 238 58 5 1971 5,565 1,031 192 1,223 926 238 55 4 1972 4,534 1,017 152 1,169 876 238 55 1973 3,517 289 119 408 170 238 1976 2,631 309 89 398 160 238 As shown above, total service payments amount to about $1.2 million per year between 1953 and 1972; thereafter they decline to about $400,000 annually be- tween 1973 and 1976. However, the amountsactually payable in Swiss francs and sterling are substantially smaller than the preceding estimates, since the bulk of the Swiss debt and the entire sterling debt are reported as being held in Luxembourg itself. Table A-1; LEMBOURG - EXTERNAL PUBLI6 DEBT

National and Gowornment gu4.anteed Debt

(In thousands) Pace 1

Debt outstanding December 31. 19'21 Identification Dcme 1'15 In currency Exioressed in of payment U.S, dollars TOTAL NATIONAL AD GOVIR1NM1T GUARANT2ED DEBT 19,266 ./

DOLLAR, DEBT, Uotal dollar debt $l1i,10 14,120 Dollar securities - Grand Duchy of Luxembourp external 0%, 1947-1971 $ 552 552 Loans from international organizations IBRD 4 1/41, 1947-1972, U.S. dollar portion of $12,000,000 loan 2/ $10,568 10,568 U.S. Government loans ERP 2 1/2%, 1948-1983 $ 3,000 3,000

SWISS FRANC DEBT Grand Duchy of Luxembourg external 4%, 1948-1983 2/ Sw fr 18,572 / 4,21

BELGIAN FRANC DEBT IBED 4 1/4, 1947-1972, Belgian franc portion of $12,000,000 loan 2/ Bfr 41,428 829

STERLING DEBT Grand Duchy of Luxembourg external 3%, 1947-1971 i21 J 66

Debt Summary by Currency

(Expressed in thousands of U.S. dollars)

Debt outstanding December 31, 1951 Amount Percent National and government guaranteed debt Total . 19,266 100,00 U.S. dollars 14,120 73.30 Swiss francs 4,251 22.06 Belgian francs 829 4.30 Pounds sterling 66 0.34

Exchange rates: Z1 = $2.80; Sw fr 1 - $0.228898; Bfr 1 = $0.02, Table A-l, LUXMBOURG - EXTENAL PUBLIC DZBT (Continued) Page 2

1/ This does not include the following debts; (In thousands) Amount outstanding Amount outstanding December 31, 1951 June 30, 1952 In currency Expressed in In currency Expressed in of payment U.S. dollars of payment U.S. dollars Amount payable to -upon the dissolution of the Belgium-Luxembourg Economic Union (interest free) Bfr 1,625,001 32,500 Bfr 1,625,001 32,500 National Bank of Belgium short-term creditp Intcrost at the - - Bfr 300,000 6,000 official discount rate of the Bank The status of this loan as of December 31, 1951 and July 31, 1952 was as follows: (In thousands) Amount disbursed and still outstanding December 31, 1951 July 31, 1952 In currency Expressed in In currency Expressed in Currency of payment U.S. dollars of payment U.S. dollars

Total 11397- 1 1 U.S. dollars $ 10,568 10,568 3 10,210 aj 10,210 Belgian francs Bfr 41,428 829 Bfr 40,029 bJ 801

ja Of this amount $559,000 had been sold by the I-ank, withouV,the Bankis guarantee 1 Of this amount Bfr 7,734,900 had been sold by the Bank, without the Bank's guarantee.

Of the original 412,000,000 authorized, '238,017 have been cancelled. jj/ Payable in Swiss francs or Luxembourg francs at Sw fr 1 = Lux fr 10.14.

/ Of this amount only Sw fr 380,000 are held outside the country.

j The entire amount is held within the country.

IBRD - STATISTICS SECTION August 29, 1952 Thble A-2; LUXMBOURG - ESTIMATED CONTRACTUAL AMORTIZATION AND INT7RST PAYMENTS ON THE EXTERNAL PUBLIC DEBT

(Expressed in thousands of U.S. dollars) Page 1

Dollar securities Loans from int'l. organizations U.S. Government loans Year Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- Interest Total standing Amorti- Interest Total standing Amorti- Interest Total January 1 zation January 1 zation January 1 zation

1952 552 21 16 37 10,568 358 437 795 3,000 - 75 75 1953 531 21 16 37 10,210 370 425 795 3,000 - 75 75 1954 510 22 15 37 9,840 382 413 795 3,000 - 75 75 1955 488 23 14 37 9,458 394 398 792 3,000 - 75 75 1956. 465 23 14 37 9,064 407 )81 788 3,000 55 74 129 1957: 442 24 13 37 8,657 420 364 784 2,946 55 73 128 1958 418 25 12 37 8,237 433 346 779 2,891 55 71 126 1959 393 25 12 37 7,804 448 327 775 2,837 27 71 "98 1960 368 26 11 37 7,356 463 307 770 2,809 27 70 97 1961 342 27 10 37 6,893 479 288 767 2,782 82 69 151 19622 315 28 9 37 6,414 494 267 761 2,700 82 67 149 19633 287 28 9 37 5,920 510 246 756 2,617 82 65 147 19644 259 29 8 37 5,410 526 224 750 2,537 82 63 145 19655 230 30 7 37 4,884 544 202 746 2,455 82 61 143 19666 200 31 6 37 4,340 562 178 740 2,373 135 58 193 19677 169 32 5 37 3,778 580 154 734 2,238 135 55 190 19683 137 33 4 37 3,198 598 130 728 2,103 135 52 187 1969, 104 34 3 37 2,600 619 104 723 1,969 135 48 183 1970- 70 35 2 37 1,981 639 77 716 1,834 135 45 180 19771 36 36 1 37 1,342 661 51 712 1,699 135 42 177 1972 681 681 22 703 1,564 135 38 173 1973z 1,429 135 35 170 19744 1,294 135 31 166 1975" 1,159 135 28 163 1976& 1,024 135 25 160 Table A-2: LUXEMBOURG - ESTIMATED CONTRACTUAL AMORTIZATION AND INTEREST PAYMENTS ON THE EXTERNAL PUBLIC =EBT (Continued) (Expressed in thousands of U.S. dollars) Page 2 Total dollar debt Swiss franc debt Belgian franc debt Debt out- Payments during year Debt out- Payments during year Debt out- Payments during year standing Amorti- Interest Total standing Amorti- Interest Total standing Amorti- Interest Total January 1 zation January 1 zation January 1 .zation

1950 14,120 379 528 907 4,251 68 170 238 829 28 33 61 1953 13,741 391 516 907 4,183 70 167 237 801 29 32 61 1954 13,350 404 503 907 49113 73 165 238 772 30 31 61 1955 12,946 417 487 904 4,040 76 162 238 742 31 30 61 1956 12,529 485 469 954 3,964 79 158 237 711 32 29 61 1957 12,045 499 450 949 3,885 82 155 237 680 34 28 62 195 11,546 513 429 942 3,803 86 152 238 646 34 27 61 XV59 11,034 500 410 910 3,717 89 149 238 612 35 26 61 2g0 10,533 516 388 904 3,628 93 145 238 577 37 24 61 19 10,017 588 367 955 3,535 96 141 237 540 37 23 60 1960 9,429 604 343 947 3,439 100 138 238 503 38 21 59 1946 8,824 620 320 940 3,339 104 134 238 464 40 19 59 1966 8,206 637 295 93Z 3,235 108 130 238 424 41 17 58 1965 7,569 656 270 926 3,127 113 125 238 383 43 15 58 1966 6,913 728 242 970 3,014 117 121 238 340 44 14 58 1967 6,185 747 214 961 2,897 122 116 238 296 45 12 57 1968 5,438 766 186 952 2,775 127 111 238 250 47 10 57 1969 4,673 788 155 943 2,648 132 106 238 203 48 8 56 1970 3,885 809 124 933 2,516 137 101 238 155 50 6 56 1971 3,077 832 94 926 2,379 143 95 238 105 52 3 55 1972 2,245 816 60 876 2,236 148 90 238 53 53 2 55 1973 1,429 135 35 170 2,088 154 84 238 1974 1,294 135 31 166 1,934 160 78 238 1975 1,159 135 28 163 1,774 167 71 238 1976 1,024 135 25 160 1,607 174 64 238 Table A-2: LUXEMBOURG - ESTIMATED CONTRACTUAL AMORTIZATION AND INTEST PAYMENTS ON THE EXT'RNAL PUBLIC IET (Continued) (Uxressed in thousands of U.S. dollars) Page 3

Sterling debt Total debt Service payments by currency Year Debt out- Payments during year Debt out- Payments during year standing Amorti- Interest Total standing Amorti- Interest Total U.S. Swiss Belgian Sterling January 1 zation January 1 zation dollars francs francs

1952 66 2 2 4 19,266 477 733 1,210 907 238 61 4 1953 64 2 2 4 18,789 492 717 1,209 907 237 61 4 1954 62 3 2 5 18,297 510 701 1,211 907 238 61 5 1955 59 3 2 5 17,787 527 681 1,208 904 238 61 5 1956 56 3 2 5 17,260 599 658 1,257 954 237 61 5 1957 53 3 2 5 16,662 618 635 1,253 949 237 62 5 1958 50 3 1 4 16,045 636 609 1,245 942 238 61 4 1959 47 3 1 4 15,410 627 586 1,213 910 238 61 4 1960 44 3 1 4 14,782 649 558 1,207 904 238 61 4 1961 41 3 1 4 14,133 724 532 1,256 955 237 60 4 1962 38 3 1 4 13,409 745 503 1,248 947 238 59 4 1963 35 3 1 4 12,662 767 474 1,241 940 238 59 4 1964 32 4 1 5 11,897 790 443 1,233 932 238 58 5 1965 28 4 1 5 11,107 816 411 1,227 926 238 58 5 1966 24 4 1 5 10,291 893 378 1,271 970 238 58 5 1967 20 4 1 5 9,398 918 343 1,261 961 238 57 5 1968 16 4 ./ 4 8,479 944 307 1,251 952 238 57 4 1969 12 4 4 7,536 972 269 1,241 943 238 56 4 1970 8 4 2/ 4 6,564 1,000 231 1,231 933 238 56 4 1971 4 4 2 4 5,565 1,031 192 1,223 926 238 55 4 1972 4534 1,017 152 1,169 876 238 55 1973 3,517 289 119 408 170 238 1974 3,228 295 109 404 166 238 1975 2,933 302 99 401 163 238 1976 2,631 309 89 398 160 238

-V Less than $500. IBRD - STATISTICS SECTION August 14, 1952