20100115

ANTANANARIVO (Reuters) - Seychelles on Friday said it had agreed with creditors to swap old debt worth $283 million, representing 89 percent of the debt it sought to restructure in an exchange offer.
The eligible instruments were 54.75 million euros in amortising notes and $230 million in 9.125 percent notes -- both due 2011 -- along with two older loans dating from 1999 and 2003.

"With the results of the exchange offer, 50 percent of the full amount of external commercial debt eligible under the exchange offer will be cancelled", Finance Minister Danny Faure said in a statement.

The arrangement, together with last year's deal with the Paris Club of creditors to cancel debt worth close to $70 million, would put the Indian Ocean archipelago's debt on a sustainable footing, Faure added.

Seychelles defaulted on a six-monthly interest payment on the 2011 Eurobond in October, 2008.

The bond default reflected an acute balance of payments crisis. The International Monetary Fund stepped in with an emergency $26 million package in November 2008.

Creditors had the option to select either new notes at discount or par. The exchange offer is scheduled to settle on Feb 11 2010.