## Loan Agreement between Danmarks Nationalbank and the International Monetary Fund

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**Canonical URL:** [Loan Agreement between Danmarks Nationalbank and the International Monetary Fund](https://www.imf.org/-/media/files/news/press-release/2021/pr214/pr214-signed-denmark-2020-borrowing-agreements.pdf)

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### Purposes and Amounts
- Loan to the Fund in SOR-denominated amount up to the equivalent of EUR 5,300 million (the "Loan Amount").
- Upon effectiveness of the NAB Reform (Decision No. 16645-(20/5), adopted January 16, 2020) and the increase in Danmarks Nationalbank's NAB credit arrangement, the Loan Amount will automatically be reduced to an SOR-denominated amount up to the equivalent of EUR 2,283 million (the "Rolled Back Loan Amount").
- Agreement is based on Article VII, Section 1(i) of the Fund's Articles of Agreement to borrow for replenishing holdings of members' currency in the General Resources Account ("GRA").
- This agreement is a "2020 Borrowing Agreement" and is part of the set collectively referred to as the "2020 Borrowing Agreements"; together with the "2016 Borrowing Agreements" they are the "Bilateral Borrowing Agreements".
- The Guidelines for Borrowing by the Fund are to be considered, noting quota subscriptions remain the basic source of Fund financing and borrowing is a temporary supplement.

### Term of the Agreement and Use
- Term ends on December 31, 2023; Fund may extend term for one further year through December 31, 2024 by Executive Board decision and with Danmarks Nationalbank consent.
- While activated, Fund may use resources under this agreement to:
  - fund any outright purchases made from the GRA during the term of this agreement; and
  - approve commitments of GRA resources during the term whose purchases could be funded by drawings under this agreement at any time during the period of such commitments, including after expiry of the term, provided such commitments include any approval that caused the activation threshold to be reached.
- Resources may also be used to fund early repayment of claims under other 2020 Borrowing Agreements if relevant creditors request early repayment as specified in paragraph 8.
- Drawings under the agreement shall aim over time to achieve broadly balanced positions among creditors under all Bilateral Borrowing Agreements relative to their commitments.

### Activation and Deactivation Conditions
- 2020 Borrowing Agreements may be activated only after Managing Director notifies the Executive Board that the modified FCC is below SOR 100 billion (the "activation threshold").
  - Notification will not be provided unless (i) the NAB is activated as of the time, or there are no available uncommitted resources under the NAB as of that time, and (ii) activation is approved by creditors representing at least 85 percent of the total credit amount committed under the 2020 Borrowing Agreements by creditors eligible to vote.
- For creditor polling, Managing Director proposes activation in writing and requests creditors' vote; creditors are ineligible to vote if their 2020 Borrowing Agreement is not effective or the member is not included in the Fund's Financial Transactions Plan for transfers of its currency.
- Managing Director may approach creditors before modified FCC is below activation threshold in extraordinary circumstances to forestall or cope with impairment of the international monetary system.
- Automatic deactivation occurs whenever the NAB is no longer activated, unless there are no available uncommitted NAB resources at that time.
- Deactivation also occurs if Managing Director notifies Executive Board that modified FCC (excluding Bilateral Borrowing Agreements amounts) has risen above activation threshold and either (i) Executive Board determines activation is no longer necessary; or (ii) six months elapse since notification and modified FCC (excluding Bilateral Borrowing Agreements amounts) has not fallen below activation threshold.
- If deactivated under these rules and modified FCC later falls below activation threshold, paragraph 2(b) procedures apply.

### Estimates, Notices, and Limits on Drawings
- Prior to each plan period for use of bilateral borrowed resources, the Fund shall provide Danmarks Nationalbank best estimates of expected drawings during forthcoming period and revised estimates when warranted.
- Danmarks Nationalbank shall not be included in the periodic plan, and no drawings shall be made under this agreement, if Denmark is not included and not being proposed by Managing Director to the Financial Transactions Plan for transfers of its currency.
- No drawings if Denmark's currency is not being used in transfers under the Financial Transactions Plan because of Denmark's balance of payments and reserve position.
- If Denmark was not included at activation vote but subsequently included, drawings may be made unless Danmarks Nationalbank notifies the Fund it does not wish to be drawn upon.
- Fund must give Danmarks Nationalbank at least five business days' (Copenhagen) notice of intention to draw, and provide payment instructions at least two business days (Fund) prior to value date via rapid authenticated means (e.g., SWIFT).
  - In exceptional circumstances where five business days' (Copenhagen) notice is not possible, notification shall be at least three business days (Copenhagen) in advance of value date and Danmarks Nationalbank will make best efforts to meet such a call.

### Evidence of Indebtedness
- Outstanding drawings will be included in statements of Denmark's position in the Fund published monthly by the Fund.
- At Danmarks Nationalbank's request, the Fund shall issue non-negotiable instruments evidencing the Fund's indebtedness. Upon repayment of an instrument and accrued interest, it shall be returned for cancellation. If partially repaid, returned and a new instrument for the remainder substituted with the same maturity date.

### Maturity
- Except as provided in paragraph 5 and paragraph 8, each drawing shall have a maturity date of three months from drawing date.
- Fund may elect to extend maturity date of any drawing or portion by additional periods of three months after the initial maturity date; such extension is automatically deemed elected for all drawings then outstanding unless Fund notifies Danmarks Nationalbank at least five business days (Fund) before a maturity date by rapid authenticated means that it does not elect to extend a particular drawing or portion.
  - Provided however that (i) maturity date of any drawing to fund purchases from the GRA shall not be extended later than the tenth anniversary of the date of such drawing, and (ii) maturity date for drawings to fund early repayments of other creditors' claims shall be a single common maturity date that is the longest remaining maximum maturity of any claim for which early repayment was requested or the tenth anniversary of the drawing to fund early repayment, whichever is earlier.
- Fund shall repay principal of each drawing on its applicable maturity date.
- After consultation, Fund may make early repayment in part or in full provided it notifies Danmarks Nationalbank at least five business days (Fund) before repayment by rapid authenticated means.
- Repayments restore pro tanto the amount that can be drawn. Extension of maturity does not reduce drawable amount.
- If maturity date is not a business day in place of payment, payment date will be next business day there; interest accrues up to payment date.

### Rate of Interest and Payment Schedule
- Each drawing bears interest at the SDR interest rate established by the Fund pursuant to Article XX, Section 3 of the Fund's Articles of Agreement.
  - If the Fund pays an interest rate higher than the SDR interest rate on outstanding balances from any other borrowing on comparable terms effected pursuant to Article VII, Section 1(@) of the Fund's Articles, and while such higher rate remains in effect, the interest rate payable on drawings under this agreement shall be equivalent to the interest rate paid by the Fund on such other comparable borrowing.
- Interest amount is calculated on basis of outstanding drawing amount; interest accrues daily and shall be paid promptly by the Fund after each July 31, October 31, January 31, and April 30.

### Denomination, Media, and Modalities of Drawings and Payments
- Each drawing and corresponding repayment shall be denominated in SDRs.
- Unless otherwise agreed, Danmarks Nationalbank shall pay each drawing on the value date specified by transfer of the SDR equivalent amount of Danish kroner to the Fund's account at Denmark's designated depository.
  - For drawings under paragraph 2(e), Danmarks Nationalbank shall ensure balances drawn that are not balances of a freely usable currency can be exchanged for a freely usable currency of its choice; for balances that are freely usable currencies, Danmarks Nationalbank shall collaborate with the Fund and other members to enable exchange for another freely usable currency.
- Except as provided in paragraph 8, repayment of principal shall be made, as determined by the Fund, in the currency borrowed whenever feasible, in Danish kroner, in special drawing rights (subject to Article XIX, Section 4 limit unless Denmark agrees otherwise), in freely usable currencies, or with Danmarks Nationalbank agreement in other currencies included in the Fund's Financial Transactions Plan for transfers.
- Interest payments shall normally be made in SDRs, but Fund and Danmarks Nationalbank may agree interest payments in Danish kroner.
- Payments in Danish kroner to an account specified by Danmarks Nationalbank; payments in SDRs by crediting Denmark's account in the Special Drawing Rights Department; payments in any other currency to an account specified by Danmarks Nationalbank.

### Early Repayment at Danmarks Nationalbank's Request
- Danmarks Nationalbank may request early repayment at face value of all or part of outstanding drawings if:
  - (i) Danmarks Nationalbank represents that Denmark's balance of payments and reserve position justifies such repayment, and
  - (ii) Fund, giving that representation the overwhelming benefit of any doubt, determines there is a need for the early repayment in light of Denmark's balance of payments and reserve position.
- After consultation, Fund may make repayments under this paragraph in SDRs or a freely usable currency as determined by the Fund or, with agreement of Danmarks Nationalbank, in currencies of other members included in the Fund's Financial Transactions Plan for transfers.

### Transferability of Claims and Related Conditions
- Danmarks Nationalbank may not transfer its obligations or claims under this agreement except as provided in subparagraphs (b)–(h) or with prior Fund consent on terms Fund approves.
- Danmarks Nationalbank may at any time transfer all or part of any claim on the Fund to:
  - any member of the Fund;
  - the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes ("other fiscal agency"); or
  - any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3.
- Conditions for transferees of claims transferred under subparagraph (b):
  - transferee shall assume liability of Danmarks Nationalbank pursuant to paragraph 5(a) regarding extension of maturities related to transferred claim;
  - transferred claim held on same terms as by Danmarks Nationalbank, except:
    - (i) transferee acquires right to request early repayment under paragraph 8 only if it is a member or central bank/other fiscal agency of a member and at transfer time the member's balance of payments and reserve position is considered sufficiently strong for its currency to be used in transfers under the Financial Transactions Plan;
    - (ii) if transferee is a member or its central bank/other fiscal agency, references to Danish kroner in paragraph 7 shall refer to that member's currency; otherwise deemed to refer to a freely usable currency determined by the Fund;
    - (iii) payments related to transferred claim shall be made to an account specified by the transferee;
    - (iv) references to business days (Copenhagen) shall refer to business days in the place where the transferee is situated.
- Price of transferred claim as agreed between Danmarks Nationalbank and transferee.
- Danmarks Nationalbank shall notify the Fund promptly of claim transferred, transferee name, amount transferred, agreed price, and value date.
- Transfers notified to the Fund under subparagraph (e) shall be reflected in Fund records if in accordance with paragraph 9 terms and conditions; transfer effective as of value date agreed between Danmarks Nationalbank and transferee.
- If a claim is transferred during a quarterly period as described in paragraph 6(b), Fund shall pay interest to transferee on transferred amount for the whole of that period.
- If requested, the Fund shall assist in seeking to arrange transfers.

### Effective Exchange Rate, Valuation Changes, and Non-Subordination
- All drawings, exchanges, and payments of principal and interest under this agreement shall be made at the exchange rates for the relevant currencies in terms of the SOR established pursuant to Article XIX, Section 7(a) of the Fund's Articles of Agreement and the rules and regulations of the Fund thereunder for the second business day of the Fund before the value date of the transfer, exchange or payment, unless otherwise agreed between Danmarks Nationalbank and the Fund.
- If this exchange rate determination date is not a business day in Copenhagen, such date shall be the last preceding business day of the Fund that is also a business day in Copenhagen.
- For applying the limit on drawings specified in paragraphs 1(a), 15(c) and 15(e), the euro value of each SOR-denominated drawing shall be determined and permanently fixed on the value date of the drawing based on the euro/SDR exchange rate established pursuant to Article XIX, Section 7(a) of the Fund's Articles of Agreement and the rules and regulations of the Fund thereunder for the second business day of the Fund before the value date of the drawing.
- If the Fund changes the method of valuing the SOR, all transfers, exchanges and payments of principal and interest made two or more business days of the Fund after the effective date of the change shall be made on the basis of the new method of valuation.
- The Fund agrees that it will not take any action that would have the effect of making Danmarks Nationalbank's claims on the Fund resulting from outstanding drawings under this agreement subordinate in any way to claims on the Fund resulting from any other borrowing effected pursuant to Article VII, Section 1(i) of the Fund's Articles of Agreement.

### Settlement, Cooperation, and Transitional Arrangements
- Any question arising under this agreement shall be settled by mutual agreement between Danmarks Nationalbank and the Fund.
- Danmarks Nationalbank stands ready to cooperate with the Fund in the spirit of IMFC/G-20 commitments as needed and appropriate.
- Transitional arrangements (paragraph 15):
  - (a) Regardless of whether this agreement is activated or not, the Fund:
    - (i) subject to paragraph 15(b), shall make drawings under this agreement to repay any outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement, and
    - (ii) may make drawings under this agreement to fund purchases under commitments approved by the Fund during an activation of the 2016 Borrowing Agreements or to fund early repayment of claims under other 2016 Borrowing Agreements in case the creditor represents a balance of payments need;
    - provided that notwithstanding paragraph 5(a) of this agreement the maximum maturity date of the claim from the repayment herein shall be the residual maximum maturity date of the claim that is repaid with drawings under this agreement;
    - and provided further that any claims under this agreement that result from the repayment herein shall be considered claims under the 2016 Borrowing Agreements for purposes of funding the early repayment of these claims in case of balance of payments need in accordance with the 2016 Borrowing Agreements, and for purposes of special calls under paragraph 23 of the Fund's Decision No. 16645-(20/5), adopted January 16, 2020.
  - (b) To the extent that claims under Danmarks Nationalbank's 2016 Borrowing Agreement or this agreement are outstanding when the increase in Danmarks Nationalbank's NAB credit arrangement becomes effective, Danmarks Nationalbank shall be deemed to request, in accordance with paragraph 23 of the Fund's Decision No. 11428-(97 /6), adopted January 27, 1997 on the NAB, as amended, that the Managing Director make calls under the NAB credit arrangement of Danmarks Nationalbank up to the maximum available amount, taking into account the Fund's need for maintaining prudential balances, to fund the repayment of such claims;
    - provided that if the increase in the NAB credit arrangement of Danmarks Nationalbank and this agreement enter into effect at the same time, the repayment of Danmarks Nationalbank's outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement shall be funded first with calls under Danmarks Nationalbank's NAB credit arrangement before drawings are made under this agreement pursuant to paragraph 15(a) above.
  - (c) If following the repayment of outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement and this agreement as provided in paragraph 15(b) above, Danmarks Nationalbank's outstanding claims under these agreements remain in excess of the Rolled Back Loan Amount as calculated pursuant to paragraph 10(b), the Fund shall repay any outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement and this agreement in excess of the Rolled Back Loan Amount;
    - provided that claims with shorter remaining maximum maturities shall be repaid before those with longer remaining maximum maturities.
  - (d) After the entry into force of this agreement, the Fund may make no further drawing under Danmarks Nationalbank's 2016 Borrowing Agreement.
  - (e) No drawing under this agreement shall be made that would cause the total outstanding drawings under both this agreement and the 2016 Borrowing Agreement between Danmarks Nationalbank and the Fund, at the time of such drawing, to:
    - (i) exceed the Loan Amount prior to the effectiveness of the increase in Danmarks Nationalbank's NAB credit arrangement, or
    - (ii) exceed the Rolled Back Loan Amount upon and after the effectiveness of the increase in Danmarks Nationalbank's NAB credit arrangement, as calculated pursuant to paragraph 10(b);
    - provided that drawings beyond the Rolled Back Loan Amount under (ii) herein are authorized, if within the same day of these drawings any resulting claim that would exceed the Rolled Back Loan Amount is repaid with a special call under Danmarks Nationalbank's NAB credit arrangement, and Danmarks Nationalbank hereby requests the Managing Director to make such calls to fund the repayment in accordance with paragraph 23 of the Fund's Decision No. 11428-(97/6), adopted January 27, 1997 on the NAB, as amended.

### Final Provisions and Signatures
- (a) This agreement may be executed in duplicate counterparts, each of which shall be deemed an original and both of which together shall constitute but one and the same instrument.
- (b) This agreement shall become effective on the date last signed below or on the date on which Denmark provides the concurrence that is required under Article VII, Section 1(i) of the Fund's Articles of Agreement for Fund borrowing of Danish kroner from Danmarks Nationalbank, or on January 1, 2021, whichever is later.
- Signatories:
  - For Danmarks Nationalbank: Lars Rohde — Governor
  - For the International Monetary Fund: Kristalina Georgieva — Managing Director
- Signature pages include duplicate signature blocks for both parties.
- Date on signature block: 10/14/2020

*Source: pr214-signed-denmark-2020-borrowing-agreements - Section 2*

### Section 1

### Loan Agreement between Danmarks Nationalbank and the International Monetary Fund

### Purposes and Amounts
- Loan to the Fund in SOR-denominated amount up to the equivalent of EUR 5,300 million (the "Loan Amount").
- Upon effectiveness of the NAB Reform (Decision No. 16645-(20/5), adopted January 16, 2020) and the increase in Danmarks Nationalbank's NAB credit arrangement, the Loan Amount will automatically be reduced to an SOR-denominated amount up to the equivalent of EUR 2,283 million (the "Rolled Back Loan Amount").
- Agreement is based on Article VII, Section 1(i) of the Fund's Articles of Agreement to borrow for replenishing holdings of members' currency in the General Resources Account ("GRA").
- This agreement is a "2020 Borrowing Agreement" and is part of the set collectively referred to as the "2020 Borrowing Agreements"; together with the "2016 Borrowing Agreements" they are the "Bilateral Borrowing Agreements".
- The Guidelines for Borrowing by the Fund are to be considered, noting quota subscriptions remain the basic source of Fund financing and borrowing is a temporary supplement.

### Term of the Agreement and Use
- Term ends on December 31, 2023; Fund may extend term for one further year through December 31, 2024 by Executive Board decision and with Danmarks Nationalbank consent.
- While activated, Fund may use resources under this agreement to:
  - fund any outright purchases made from the GRA during the term of this agreement; and
  - approve commitments of GRA resources during the term whose purchases could be funded by drawings under this agreement at any time during the period of such commitments, including after expiry of the term, provided such commitments include any approval that caused the activation threshold to be reached.
- Resources may also be used to fund early repayment of claims under other 2020 Borrowing Agreements if relevant creditors request early repayment as specified in paragraph 8.
- Drawings under the agreement shall aim over time to achieve broadly balanced positions among creditors under all Bilateral Borrowing Agreements relative to their commitments.

### Activation and Deactivation Conditions
- 2020 Borrowing Agreements may be activated only after Managing Director notifies the Executive Board that the modified FCC is below SOR 100 billion (the "activation threshold").
  - Notification will not be provided unless (i) the NAB is activated as of the time, or there are no available uncommitted resources under the NAB as of that time, and (ii) activation is approved by creditors representing at least 85 percent of the total credit amount committed under the 2020 Borrowing Agreements by creditors eligible to vote.
- For creditor polling, Managing Director proposes activation in writing and requests creditors' vote; creditors are ineligible to vote if their 2020 Borrowing Agreement is not effective or the member is not included in the Fund's Financial Transactions Plan for transfers of its currency.
- Managing Director may approach creditors before modified FCC is below activation threshold in extraordinary circumstances to forestall or cope with impairment of the international monetary system.
- Automatic deactivation occurs whenever the NAB is no longer activated, unless there are no available uncommitted NAB resources at that time.
- Deactivation also occurs if Managing Director notifies Executive Board that modified FCC (excluding Bilateral Borrowing Agreements amounts) has risen above activation threshold and either (i) Executive Board determines activation is no longer necessary; or (ii) six months elapse since notification and modified FCC (excluding Bilateral Borrowing Agreements amounts) has not fallen below activation threshold.
- If deactivated under these rules and modified FCC later falls below activation threshold, paragraph 2(b) procedures apply.

### Estimates, Notices, and Limits on Drawings
- Prior to each plan period for use of bilateral borrowed resources, the Fund shall provide Danmarks Nationalbank best estimates of expected drawings during forthcoming period and revised estimates when warranted.
- Danmarks Nationalbank shall not be included in the periodic plan, and no drawings shall be made under this agreement, if Denmark is not included and not being proposed by Managing Director to the Financial Transactions Plan for transfers of its currency.
- No drawings if Denmark's currency is not being used in transfers under the Financial Transactions Plan because of Denmark's balance of payments and reserve position.
- If Denmark was not included at activation vote but subsequently included, drawings may be made unless Danmarks Nationalbank notifies the Fund it does not wish to be drawn upon.
- Fund must give Danmarks Nationalbank at least five business days' (Copenhagen) notice of intention to draw, and provide payment instructions at least two business days (Fund) prior to value date via rapid authenticated means (e.g., SWIFT).
  - In exceptional circumstances where five business days' (Copenhagen) notice is not possible, notification shall be at least three business days (Copenhagen) in advance of value date and Danmarks Nationalbank will make best efforts to meet such a call.

### Evidence of Indebtedness
- Outstanding drawings will be included in statements of Denmark's position in the Fund published monthly by the Fund.
- At Danmarks Nationalbank's request, the Fund shall issue non-negotiable instruments evidencing the Fund's indebtedness. Upon repayment of an instrument and accrued interest, it shall be returned for cancellation. If partially repaid, returned and a new instrument for the remainder substituted with the same maturity date.

### Maturity
- Except as provided in paragraph 5 and paragraph 8, each drawing shall have a maturity date of three months from drawing date.
- Fund may elect to extend maturity date of any drawing or portion by additional periods of three months after the initial maturity date; such extension is automatically deemed elected for all drawings then outstanding unless Fund notifies Danmarks Nationalbank at least five business days (Fund) before a maturity date by rapid authenticated means that it does not elect to extend a particular drawing or portion.
  - Provided however that (i) maturity date of any drawing to fund purchases from the GRA shall not be extended later than the tenth anniversary of the date of such drawing, and (ii) maturity date for drawings to fund early repayments of other creditors' claims shall be a single common maturity date that is the longest remaining maximum maturity of any claim for which early repayment was requested or the tenth anniversary of the drawing to fund early repayment, whichever is earlier.
- Fund shall repay principal of each drawing on its applicable maturity date.
- After consultation, Fund may make early repayment in part or in full provided it notifies Danmarks Nationalbank at least five business days (Fund) before repayment by rapid authenticated means.
- Repayments restore pro tanto the amount that can be drawn. Extension of maturity does not reduce drawable amount.
- If maturity date is not a business day in place of payment, payment date will be next business day there; interest accrues up to payment date.

### Rate of Interest
- Each drawing bears interest at the SDR interest rate established by the Fund pursuant to Article XX, Section 3 of the Fund's Articles of Agreement.
  - If the Fund pays an interest rate higher than the SDR interest rate on outstanding balances from any other borrowing on comparable terms effected pursuant to Article VII, Section 1(@) of the Fund's Articles, and while such higher rate remains in effect, the interest rate payable on drawings under this agreement shall be equivalent to the interest rate paid by the Fund on such other comparable borrowing.
- Interest amount is calculated on basis of outstanding drawing amount; interest accrues daily and shall be paid promptly by the Fund after each July 31, October 31, January 31, and April 30.

### Denomination, Media, and Modalities of Drawings and Payments
- Each drawing and corresponding repayment shall be denominated in SDRs.
- Unless otherwise agreed, Danmarks Nationalbank shall pay each drawing on the value date specified by transfer of the SDR equivalent amount of Danish kroner to the Fund's account at Denmark's designated depository.
  - For drawings under paragraph 2(e), Danmarks Nationalbank shall ensure balances drawn that are not balances of a freely usable currency can be exchanged for a freely usable currency of its choice; for balances that are freely usable currencies, Danmarks Nationalbank shall collaborate with the Fund and other members to enable exchange for another freely usable currency.
- Except as provided in paragraph 8, repayment of principal shall be made, as determined by the Fund, in the currency borrowed whenever feasible, in Danish kroner, in special drawing rights (subject to Article XIX, Section 4 limit unless Denmark agrees otherwise), in freely usable currencies, or with Danmarks Nationalbank agreement in other currencies included in the Fund's Financial Transactions Plan for transfers.
- Interest payments shall normally be made in SDRs, but Fund and Danmarks Nationalbank may agree interest payments in Danish kroner.
- Payments in Danish kroner to an account specified by Danmarks Nationalbank; payments in SDRs by crediting Denmark's account in the Special Drawing Rights Department; payments in any other currency to an account specified by Danmarks Nationalbank.

### Early Repayment at Danmarks Nationalbank's Request
- Danmarks Nationalbank may request early repayment at face value of all or part of outstanding drawings if:
  - (i) Danmarks Nationalbank represents that Denmark's balance of payments and reserve position justifies such repayment, and
  - (ii) Fund, giving that representation the overwhelming benefit of any doubt, determines there is a need for the early repayment in light of Denmark's balance of payments and reserve position.
- After consultation, Fund may make repayments under this paragraph in SDRs or a freely usable currency as determined by the Fund or, with agreement of Danmarks Nationalbank, in currencies of other members included in the Fund's Financial Transactions Plan for transfers.

### Transferability
- Danmarks Nationalbank may not transfer its obligations or claims under this agreement except as provided in subparagraphs (b)–(h) or with prior Fund consent on terms Fund approves.
- Danmarks Nationalbank may at any time transfer all or part of any claim on the Fund to:
  - any member of the Fund;
  - the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes ("other fiscal agency"); or
  - any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3.
- Conditions for transferees of claims transferred under subparagraph (b):
  - transferee shall assume liability of Danmarks Nationalbank pursuant to paragraph 5(a) regarding extension of maturities related to transferred claim;
  - transferred claim held on same terms as by Danmarks Nationalbank, except:
    - (i) transferee acquires right to request early repayment under paragraph 8 only if it is a member or central bank/other fiscal agency of a member and at transfer time the member's balance of payments and reserve position is considered sufficiently strong for its currency to be used in transfers under the Financial Transactions Plan;
    - (ii) if transferee is a member or its central bank/other fiscal agency, references to Danish kroner in paragraph 7 shall refer to that member's currency; otherwise deemed to refer to a freely usable currency determined by the Fund;
    - (iii) payments related to transferred claim shall be made to an account specified by the transferee;
    - (iv) references to business days (Copenhagen) shall refer to business days in the place where the transferee is situated.
- Price of transferred claim as agreed between Danmarks Nationalbank and transferee.
- Danmarks Nationalbank shall notify the Fund promptly of claim transferred, transferee name, amount transferred, agreed price, and value date.
- Transfers notified to the Fund under subparagraph (e) shall be reflected in Fund records if in accordance with paragraph 9 terms and conditions; transfer effective as of value date agreed between Danmarks Nationalbank and transferee.
- If a claim is transferred during a quarterly period as described in paragraph 6(b), Fund shall pay interest to transferee on transferred amount for the whole of that period.
- If requested, the Fund shall assist in seeking to arrange transfers.

*Loan Agreement between Danmarks Nationalbank and the International Monetary Fund — Section 1*

### Section 2

### pr214-signed-denmark-2020-borrowing-agreements - Section 2

### Effective Exchange Rate
- All drawings, exchanges, and payments of principal and interest under this agreement shall be made at the exchange rates for the relevant currencies in terms of the SOR established pursuant to Article XIX, Section 7(a) of the Fund's Articles of Agreement and the rules and regulations of the Fund thereunder for the second business day of the Fund before the value date of the transfer, exchange or payment, unless otherwise agreed between Danmarks Nationalbank and the Fund.
- If this exchange rate determination date is not a business day in Copenhagen, such date shall be the last preceding business day of the Fund that is also a business day in Copenhagen.
- For applying the limit on drawings specified in paragraphs 1(a), 15(c) and 15(e), the euro value of each SOR-denominated drawing shall be determined and permanently fixed on the value date of the drawing based on the euro/SDR exchange rate established pursuant to Article XIX, Section 7(a) of the Fund's Articles of Agreement and the rules and regulations of the Fund thereunder for the second business day of the Fund before the value date of the drawing.
- If that exchange rate determination date is not a business day in Copenhagen, the date shall be the last preceding business day of the Fund that is also a business day in Copenhagen.

### Changes in Method of Valuation of SOR (Paragraph 11)
- If the Fund changes the method of valuing the SOR, all transfers, exchanges and payments of principal and interest made two or more business days of the Fund after the effective date of the change shall be made on the basis of the new method of valuation.

### Non-Subordination of Claims (Paragraph 12)
- The Fund agrees that it will not take any action that would have the effect of making Danmarks Nationalbank's claims on the Fund resulting from outstanding drawings under this agreement subordinate in any way to claims on the Fund resulting from any other borrowing effected pursuant to Article VII, Section 1(i) of the Fund's Articles of Agreement.

### Settlement of Questions (Paragraph 13)
- Any question arising under this agreement shall be settled by mutual agreement between Danmarks Nationalbank and the Fund.

### Cooperation with the Fund (Paragraph 14)
- Danmarks Nationalbank stands ready to cooperate with the Fund in the spirit of IMFC/G-20 commitments as needed and appropriate.

### Transitional Arrangements (Paragraph 15)
- (a) Regardless of whether this agreement is activated or not, the Fund:
  - (i) subject to paragraph 15(b) below, shall make drawings under this agreement to repay any outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement, and
  - (ii) may make drawings under this agreement to fund purchases under commitments approved by the Fund during an activation of the 2016 Borrowing Agreements or to fund early repayment of claims under other 2016 Borrowing Agreements in case the creditor represents a balance of payments need;
  - provided that notwithstanding paragraph 5(a) of this agreement the maximum maturity date of the claim from the repayment herein shall be the residual maximum maturity date of the claim that is repaid with drawings under this agreement;
  - and provided further that any claims under this agreement that result from the repayment herein shall be considered claims under the 2016 Borrowing Agreements for purposes of funding the early repayment of these claims in case of balance of payments need in accordance with the 2016 Borrowing Agreements, and for purposes of special calls under paragraph 23 of the Fund's Decision No. 16645-(20/5), adopted January 16, 2020.
- (b) To the extent that claims under Danmarks Nationalbank's 2016 Borrowing Agreement or this agreement are outstanding when the increase in Danmarks Nationalbank's NAB credit arrangement becomes effective, Danmarks Nationalbank shall be deemed to request, in accordance with paragraph 23 of the Fund's Decision No. 11428-(97 /6), adopted January 27, 1997 on the NAB, as amended, that the Managing Director make calls under the NAB credit arrangement of Danmarks Nationalbank up to the maximum available amount, taking into account the Fund's need for maintaining prudential balances, to fund the repayment of such claims;
  - provided that if the increase in the NAB credit arrangement of Danmarks Nationalbank and this agreement enter into effect at the same time, the repayment of Danmarks Nationalbank's outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement shall be funded first with calls under Danmarks Nationalbank's NAB credit arrangement before drawings are made under this agreement pursuant to paragraph 15(a) above.
- (c) If following the repayment of outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement and this agreement as provided in paragraph 15(b) above, Danmarks Nationalbank's outstanding claims under these agreements remain in excess of the Rolled Back Loan Amount as calculated pursuant to paragraph 10(b), the Fund shall repay any outstanding claims under Danmarks Nationalbank's 2016 Borrowing Agreement and this agreement in excess of the Rolled Back Loan Amount;
  - provided that claims with shorter remaining maximum maturities shall be repaid before those with longer remaining maximum maturities.
- (d) After the entry into force of this agreement, the Fund may make no further drawing under Danmarks Nationalbank's 2016 Borrowing Agreement.
- (e) No drawing under this agreement shall be made that would cause the total outstanding drawings under both this agreement and the 2016 Borrowing Agreement between Danmarks Nationalbank and the Fund, at the time of such drawing, to:
  - (i) exceed the Loan Amount prior to the effectiveness of the increase in Danmarks Nationalbank's NAB credit arrangement, or
  - (ii) exceed the Rolled Back Loan Amount upon and after the effectiveness of the increase in Danmarks Nationalbank's NAB credit arrangement, as calculated pursuant to paragraph 10(b);
  - provided that drawings beyond the Rolled Back Loan Amount under (ii) herein are authorized, if within the same day of these drawings any resulting claim that would exceed the Rolled Back Loan Amount is repaid with a special call under Danmarks Nationalbank's NAB credit arrangement, and Danmarks Nationalbank hereby requests the Managing Director to make such calls to fund the repayment in accordance with paragraph 23 of the Fund's Decision No. 11428-(97/6), adopted January 27, 1997 on the NAB, as amended.

### Final Provisions (Paragraph 16)
- (a) This agreement may be executed in duplicate counterparts, each of which shall be deemed an original and both of which together shall constitute but one and the same instrument.
- (b) This agreement shall become effective on the date last signed below or on the date on which Denmark provides the concurrence that is required under Article VII, Section 1(i) of the Fund's Articles of Agreement for Fund borrowing of Danish kroner from Danmarks Nationalbank, or on January 1, 2021, whichever is later.

### Signatures and Dates
- For Danmarks Nationalbank:
  - Lars Rohde — Governor
- For the International Monetary Fund:
  - Kristalina Georgieva — Managing Director
- Signature pages include duplicate signature blocks for:
  - For Danmarks Nationalbank: Lars Rohde — Governor
  - For the International Monetary Fund: Kristalina Georgieva — Managing Director
- Date on signature block: 10/14/2020

*Source: pr214-signed-denmark-2020-borrowing-agreements - Section 2*

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_Source: https://www.imf.org/-/media/files/news/press-release/2021/pr214/pr214-signed-denmark-2020-borrowing-agreements.pdf_