## INTRODUCTION

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---

### Overview
- The Fund, as Trustee of the Poverty Reduction and Growth Trust (PRGT or Trust), has entered into:
  - a new borrowing agreement with the Bank of Spain (Spain) providing SDR 450 million;
  - amendments to the 2010 NPA with the Government of Japan (Japan) providing SDR 1.8 billion (augmentation);
  - a new note purchase agreement (NPA) with the People’s Bank of China (China) providing SDR 800 million.
- Total new PRGT lending resources from these agreements: SDR 3.05 billion.
- These agreements are among the first ten loan contributions in the context of the Board-endorsed effort to raise SDR 11 billion in new PRGT loan resources.

### Timing and effectiveness
- Effective dates:
  - Spain: February 22, 2017.
  - Japan (amendments): April 20, 2017.
  - China: April 21, 2017.
- The paper is presented to the Executive Board for information under the authority of Section III, paragraph 2 of the Instrument to establish the PRGT.

### Framework changes incorporated
- Incorporated provisions:
  - extensions of the commitments and drawdown period for PRGT loans to end-2020 and end-2024, respectively;
  - incorporation of the Chinese Renminbi (RMB) interest rate instrument of six-month maturity for borrowing agreements in currencies;
  - provision that, if the derived six-month SDR interest rate formula results in a negative rate, the applicable interest rate shall be zero percent.

### Principal account and drawing terms
- Account designations:
  - The Spain borrowing agreement (SDR 450 million), Japan NPA (SDR 3.6 billion in total under the NPA), and China NPA (SDR 800 million) are for the benefit of the General Loan Account (GLA).
- Drawings:
  - Drawings under all agreements can be made through December 31, 2024.
  - Notification periods for intention to draw:
    - Spain and China: five days (creditor's location).
    - Japan: seven business days.
  - Japan: Unless otherwise agreed, no more than SDR 600 million drawn in any calendar month, except this limit will not apply to encashment-related purchases.

### Denomination, media of payment, and repayment
- Denomination:
  - Loan commitments and operations are denominated in SDRs.
- Disbursement media (unless otherwise agreed between Trustee and creditor):
  - Spain: transfer of the equivalent amount of euros.
  - Japan: SDRs or U.S. dollars.
  - China: RMB to an account specified by the Trustee.
- Payments of principal and interest by the Trust:
  - Spain: euros.
  - China: RMB (or other media as agreed).
  - Japan: interest in SDRs; principal repayments in the same media originally used to purchase each note or other media as agreed.
- Maturity:
  - Spain: each drawing repaid in accordance with the repayment schedule for the loan disbursement under the facility for which it was drawn.
  - Japan and China NPAs: each note initial maturity of six months; Trustee may elect to extend maturity by additional periods of up to six months (automatic election unless Trustee notifies Japan otherwise); maximum extension generally up to the maturity dates for the loan disbursement under the facility of the Trust for which a note was issued.

### Interest, payments schedule, and suspension provisions
- Interest:
  - Spain and China agreements: outstanding drawings earn interest at the six-month derived SDR rate; payable semi-annually promptly after June 30 and December 31.
  - Japan agreement: payment of the official SDR interest rate on outstanding claims; payable quarterly promptly after July 31, October 31, January 31, and April 30.
- Suspension of drawings for nonpayment:
  - If any installment of principal or interest is not paid within ten days after its due date, the agreements provide for suspension of further drawings pending consultations with the creditor (Spain paragraph 2(b); Japan paragraph 2(d); China paragraph 2(c)).

### Transfer, encashment, and temporary suspension
- Transfer of claims:
  - Agreements permit voluntary transfer of claims on the Trust to a limited group of official-sector entities.
  - Provision for temporary suspension of disbursements at any time prior to June 30, 2024, in the event of a liquidity need by the creditor.
- Encashment:
  - All agreements include the right to seek early repayment (encashment) of outstanding claims in case of balance of payments and reserve needs, and authorize Trustee drawings to fund such encashment requests of other participating creditors to any of the Loan Accounts of the Trust.
  - Right to encashment is subject to the availability of resources under borrowing agreements of other participating creditors.

### Conclusion and financing context
- The Spain borrowing agreement, augmentation of Japan’s NPA, and China NPA are among the first ten PRGT loan contributions under the 2015–17 PRGT loan mobilization round and constitute an important step toward meeting the SDR 11 billion target.
- Additional bilateral loan contributions, including from other new lenders, are still needed to ensure the Trust can meet low-income countries’ needs over the near and medium term.

### Amendments to the Note Purchase Agreement between the Government of Japan and the IMF (Trustee)
- Context:
  - On April 20, 2017, the Government of Japan’s new loan contribution became effective when the Managing Director acknowledged the Ministry of Finance’s consent to the amendment of its borrowing agreement dated September 3, 2010.
- Key amendments:
  - Amendment to total principal amount:
    - Paragraph 2(a) modified to: “Notes in a total principal amount of up to the equivalent of SDR 1,800 million 3.6 billion may be issued under this Agreement.”
  - Notice period, media of payment proposal, and monthly purchase limit:
    - Modified paragraph 2(b) specifies Trustee may issue and Purchaser shall purchase Notes at any time from the date this Agreement becomes effective through December 31, 2024.
    - Trustee shall give Purchaser at least five seven business days’ (Tokyo) notice of: (i) the Trustee’s intention to issue Notes including the amount, and (ii) subject to paragraph 5(a), the Trustee’s proposal for the media of payment for purchase; payment instructions provided at least two business days (Tokyo) prior to the value date by SWIFT.
    - New paragraph 2(c): “Unless otherwise agreed between the Purchaser and the Trustee, there will be no more than SDR 600 million purchased under this agreement in any calendar month. The provisions in this paragraph 2(c) do not apply to purchases under paragraph 3(ii).”
    - Paragraph 2(d): If principal or interest under a Note is not paid fully within ten days after its due date, the Trustee shall not issue further Notes pending consultations, but may resume issuances once arrears are discharged.
  - Media selection process (paragraph 5(a) modified):
    - Purchase price paid by transfer of SDRs, U.S. dollars or any other freely usable currency as may be agreed.
    - Trustee shall propose SDRs, U.S. dollars or any other freely usable currency as the media of payment in its notice under paragraph 2(b).
    - Purchaser deemed to consent unless within one business days from receipt Purchaser informs Trustee of preference for another media (SDRs, U.S. dollars or any other freely usable currency).
    - At least five business days (Tokyo) prior to issuance, Trustee shall send a final notice confirming media or cancelling initial notice if no agreement reached.
  - Payments (General Terms and Conditions, paragraph 7(a) modified):
    - Payments of interest on the Notes in SDRs, and payments of the principal amount under each Note in the same media originally used to purchase each Note.
    - Payments may be made in SDRs, or such currency as may be agreed; payments of principal pursuant to paragraph 6(b) shall be made in SDRs or a freely usable currency as determined by the Trustee after consultation.
    - Trustee shall give the Permitted Holder at least five business days’ (Washington DC) notice of intention to seek agreement for making interest payments in a media other than SDRs, or principal repayments in a media other than the media originally used to purchase each Note.

### Note Purchase Agreement between People’s Bank of China and the IMF (Trustee) — principal terms
- Authorized issuance and term:
  - Paragraph 2(a): “Notes in a total principal amount of up to the equivalent of SDR 800 million may be issued under this Agreement.”
  - Paragraph 2(b): Trustee may issue and Purchaser shall purchase Notes from the date this Agreement becomes effective through December 31, 2024.
  - Trustee to give Purchaser at least five business days’ (Beijing) notice of intention to issue Notes and provide payment instructions at least two Fund business days prior to the value date by SWIFT.
  - Paragraph 2(c): If principal or interest not paid fully within ten days after due date, Trustee shall not issue further Notes pending consultations; issuances may resume once arrears discharged.
- Uses of proceeds (paragraph 3):
  - To finance (i) loan disbursements by the Trustee under the General Loan Account and (ii) early repayment pursuant to Section III, paragraph 4(b) of the PRGT Instrument of Trustee’s outstanding indebtedness under other borrowing agreements to any Loan Accounts of the Trust.
- Denomination, issue increments, and purchase price:
  - Notes denominated in SDR.
  - Notes issued in multiples of SDR 1,000; minimum amount of each issue SDR 1 million.
  - Purchase price for each Note shall be 100 percent of the principal amount.
- Media and exchange terms (paragraph 5):
  - Paragraph 5(a): Purchase price paid by transfer of renminbi (RMB) to an account specified by the Trustee unless otherwise agreed.
  - Paragraph 5(b): Purchases where purchase price is paid in currency and all exchanges made at the exchange rate for the relevant currency in terms of the SDR established pursuant to Article XIX, Section 7(a) for the second business day of the Fund before the value date.
  - Paragraph 5(c): If the Fund changes method of valuing the SDR, purchases, transfers and exchanges made three or more business days of the Fund after effective date of the change shall be made on basis of the new method.
- Suspension and transfer rights:
  - Issuance may be suspended at Purchaser’s request temporarily at any time prior to June 30, 2024, per Section III, paragraphs 4(c) and (d) of the Instrument.
  - Purchaser has right to transfer all or part of Notes held in accordance with Section VI of the PRGT Instrument and General Terms and Conditions (Annex I).
- Execution and effectiveness:
  - Any question arising under this Agreement settled by mutual agreement between Purchaser and the Trustee.
  - Agreement may be executed in duplicate counterparts; becomes effective on the last date written below.
  - Signatures and dates recorded:
    - For the PEOPLE’S BANK OF CHINA: March 24, 2017 — YI Gang/s — Deputy Governor.
    - For the INTERNATIONAL MONETARY FUND, as TRUSTEE OF THE POVERTY REDUCTION AND GROWTH TRUST: April 21, 2017 — Christine Lagarde/s — Managing Director.

### Highlights from Annex I — General Terms and Conditions (People’s Bank of China)
- Form, delivery and custody (paragraph 2):
  - Notes issued only in book entry form; Trustee maintains book entry account recording number, issue date, principal amount, maturity date.
  - Registered Note may be issued on request in form in Annex II; Trustee will keep registered Notes in custody unless otherwise agreed.
- Maturity (paragraph 3):
  - Each Note shall have a maturity date six months from issue date unless otherwise provided.
  - Trustee may extend maturity in additional periods up to six months; Trustee deemed to have elected extension unless notified at least five business days (Washington) before maturity that Trustee does not elect to extend.
  - Maturity date shall not exceed maturity dates for loan disbursement under the facility for which it was issued.
  - Trustee will pay principal on applicable maturity date; if not a business day payment occurs next business day in place of payment.
  - Trustee may make early repayments with agreement of Permitted Holder.
  - Trustee will cancel Notes upon repayment and issue new Notes for remainder where appropriate.
- Rate of interest (paragraph 4):
  - Interest computed at annual rate determined by Trustee at time of each drawing and at six-month intervals thereafter from product of:
    - (i) interest rates on domestic instruments in each currency in the SDR basket as reported two LIBOR business days prior to commencement of interest period (or first preceding business day if not a Fund business day), including:
      - the bond equivalent yield for six-month U.S. Treasury bills,
      - the six-month Euro-denominated euro government bond yield for bonds rated AA and above, as published by the European Central Bank,
      - the bond equivalent yield on six-month Chinese treasury bills,
      - the bond equivalent yield on six-month Japanese treasury bills,
      - the six-month interbank rate in the United Kingdom,
    - (ii) the percentage weight of that currency in the valuation of the SDR on that business day, calculated using same amounts and exchange rates as used by the Fund for SDR valuation in terms of the U.S. dollar on that day.
  - Applicable interest rate is sum of the products, rounded to two decimal places; if calculation results in a negative interest rate, interest rate shall be zero percent.
  - Interest payable calculated on an actual day basis and paid semiannually promptly after June 30 and December 31.
- Transferability (paragraph 5):
  - Permitted Holder may transfer all or part of any Note to any member of the Fund, central bank or fiscal agency of a member, or a prescribed SDR holder.
  - Transferee must notify Trustee prior to transfer that it accepts obligations with respect to extensions of maturity and acquires rights of transferor.
  - Price of transferred Note as agreed between transferor and transferee.
  - Transfer recorded by Trustee and effective as of agreed value date upon recording.
  - Trustee will cancel transferred Note and, if registered, transferor must surrender registered Note for cancellation; Trustee will issue new Notes to transferee and transferor as applicable with same issue date and maturity date.
  - If transfer occurs during semiannual interest period, Trustee pays interest to transferee on principal amount for whole of that period.

### Key numeric figures and exact terms (verbatim)
- SDR 1,800 million
- 3.6 billion
- SDR 600 million
- five seven business days’ (Tokyo)
- two business days (Tokyo)
- ten days
- five business days’ (Washington DC)
- SDR 800 million
- December 31, 2024
- five business days’ (Beijing)
- two Fund business days
- SDR 1,000
- SDR 1 million
- 100 percent
- renminbi (RMB)
- June 30, 2024
- March 24, 2017
- April 21, 2017
- six months
- five business days (Washington)
- two LIBOR business days
- six-month U.S. Treasury bills
- six-month Euro-denominated euro government bond yield for bonds rated AA and above
- bond equivalent yield on six-month Chinese treasury bills
- bond equivalent yield on six-month Japanese treasury bills
- six-month interbank rate in the United Kingdom
- rounded to two decimal places
- zero percent
- June 30 and December 31

### 6. Early Payment by the Trust at Request of Certain Permitted Holders
- Scope of Permitted Holders:
  - Rights in subparagraph (b) apply only to a Permitted Holder that is:
    - (A) the Purchaser, or
    - (B) a member of the Fund or the central bank or other fiscal agency of a member of the Fund that has acquired the Notes by transfer if, at the time of such transfer, the balance of payments and reserve position of the member or Relevant Member, as the case may be, was considered sufficiently strong in the opinion of the Fund for its currency to be usable in transfers under the Financial Transactions Plan.
- Early payment procedure:
  - If a Permitted Holder described in subparagraph (a) represents that its balance of payments and reserve position justifies early payment and the Trustee agrees, then:
    - the Trust shall pursuant to Section III, paragraph 4(b) of the PRGT Instrument pay the principal amount of the Permitted Holder’s Notes covered by subparagraph (a) that is then outstanding,
    - up to the amount for which early payment has been requested, and
    - subject to the availability or resources under borrowing agreements to the Loan Accounts of the PRGT that authorize drawings for such early repayments.
- Media and modalities of payments on the Notes (paragraph 7):
  - Payments by the Trustee of the principal amount of Notes and of interest on the Notes shall be made in renminbi (RMB), or in other media as may be agreed; provided however that payments by the Trustee of principal pursuant to paragraph 6(b) shall be made in SDRs or a freely usable currency as determined by the Trustee after consultation with the Permitted Holder.
  - All currency payments by the Trustee to a Permitted Holder will be credited to an account specified in advance by the Permitted Holder.
  - Payments in SDRs will be made by crediting the SDR Department account of the Permitted Holder or of the Relevant Member as the case may be.
- Effective exchange rate for payments (paragraph 8):
  - Unless otherwise agreed, all payments in currency of principal and interest will be made at the exchange rates for the relevant currencies in terms of the SDR established pursuant to Article XIX, Section 7(a) of the Fund’s Articles of Agreement for the second business day of the Fund before the value date of the payment.
- Changes in method of valuation of SDR (paragraph 9):
  - If the Fund changes the method of valuing the SDR, transfers, exchanges, and payments made three or more business days of the Fund after the effective date of the change will be on the basis of the new method.
  - If there is a change in the currency composition of the SDR basket, interest rate calculations and instruments under paragraph 4(a) will be modified to incorporate widely used six-month domestic instrument rates for any new currency and delete references for any removed currency; modification effective as of the date the changes in method of valuing the SDR become effective.
- Settlement of questions (paragraph 10):
  - Any question arising under any Note shall be settled by mutual agreement between the relevant Permitted Holder and the Trustee.

*International Monetary Fund — INTRODUCTION (pp050117new-prgt-loan-resources-from-china,japan,and-spain — INTRODUCTION)*

### INTRODUCTION

### INTRODUCTION

### Overview
- The Fund, as Trustee of the Poverty Reduction and Growth Trust (PRGT or Trust), has entered into:
  - a new borrowing agreement with the Bank of Spain (Spain) providing SDR 450 million;
  - amendments to the 2010 NPA with the Government of Japan (Japan) providing SDR 1.8 billion (augmentation);
  - a new note purchase agreement (NPA) with the People’s Bank of China (China) providing SDR 800 million.
- Total new PRGT lending resources from these agreements: SDR 3.05 billion.
- These agreements are among the first ten loan contributions in the context of the Board-endorsed effort to raise SDR 11 billion in new PRGT loan resources.

### Timing and effectiveness
- Effective dates:
  - Spain: February 22, 2017.
  - Japan (amendments): April 20, 2017.
  - China: April 21, 2017.
- The paper is presented to the Executive Board for information under the authority of Section III, paragraph 2 of the Instrument to establish the PRGT.

### Framework changes incorporated
- The new Spain agreement and China NPA (and applicable amendments to Japan) incorporate:
  - extensions of the commitments and drawdown period for PRGT loans to end-2020 and end-2024, respectively;
  - incorporation of the Chinese Renminbi (RMB) interest rate instrument of six-month maturity for borrowing agreements in currencies;
  - provision that, if the derived six-month SDR interest rate formula results in a negative rate, the applicable interest rate shall be zero percent.

### Principal account and drawing terms
- Account designations:
  - The Spain borrowing agreement (SDR 450 million), Japan NPA (SDR 3.6 billion in total under the NPA), and China NPA (SDR 800 million) are for the benefit of the General Loan Account (GLA).
- Drawings:
  - Drawings under all agreements can be made through December 31, 2024.
  - Notification periods for intention to draw:
    - Spain and China: five days (creditor's location).
    - Japan: seven business days.
  - Japan: Unless otherwise agreed, no more than SDR 600 million drawn in any calendar month, except this limit will not apply to encashment-related purchases.

### Denomination, media of payment, and repayment
- Denomination:
  - Loan commitments and operations are denominated in SDRs.
- Disbursement media (unless otherwise agreed between Trustee and creditor):
  - Spain: transfer of the equivalent amount of euros.
  - Japan: SDRs or U.S. dollars.
  - China: RMB to an account specified by the Trustee.
- Payments of principal and interest by the Trust:
  - Spain: euros.
  - China: RMB (or other media as agreed).
  - Japan: interest in SDRs; principal repayments in the same media originally used to purchase each note or other media as agreed.
- Maturity:
  - Spain: each drawing repaid in accordance with the repayment schedule for the loan disbursement under the facility for which it was drawn.
  - Japan and China NPAs: each note initial maturity of six months; Trustee may elect to extend maturity by additional periods of up to six months (automatic election unless Trustee notifies Japan otherwise); maximum extension generally up to the maturity dates for the loan disbursement under the facility of the Trust for which a note was issued.

### Interest, payments schedule, and suspension provisions
- Interest:
  - Spain and China agreements: outstanding drawings earn interest at the six-month derived SDR rate; payable semi-annually promptly after June 30 and December 31.
  - Japan agreement: payment of the official SDR interest rate on outstanding claims; payable quarterly promptly after July 31, October 31, January 31, and April 30.
- Suspension of drawings for nonpayment:
  - If any installment of principal or interest is not paid within ten days after its due date, the agreements provide for suspension of further drawings pending consultations with the creditor (Spain paragraph 2(b); Japan paragraph 2(d); China paragraph 2(c)).

### Transfer, encashment, and temporary suspension
- Transfer of claims:
  - Agreements permit voluntary transfer of claims on the Trust to a limited group of official-sector entities.
  - Provision for temporary suspension of disbursements at any time prior to June 30, 2024, in the event of a liquidity need by the creditor.
- Encashment:
  - All agreements include the right to seek early repayment (encashment) of outstanding claims in case of balance of payments and reserve needs, and authorize Trustee drawings to fund such encashment requests of other participating creditors to any of the Loan Accounts of the Trust.
  - Right to encashment is subject to the availability of resources under borrowing agreements of other participating creditors.

### Conclusion and financing context
- The Spain borrowing agreement, augmentation of Japan’s NPA, and China NPA are among the first ten PRGT loan contributions under the 2015–17 PRGT loan mobilization round and constitute an important step toward meeting the SDR 11 billion target.
- Additional bilateral loan contributions, including from other new lenders, are still needed to ensure the Trust can meet low-income countries’ needs over the near and medium term.

*International Monetary Fund — INTRODUCTION (pp050117new-prgt-loan-resources-from-china-japan-and-spain — INTRODUCTION)*

### 13. Any question arising hereunder shall be settled by mutual agreement between the Bank and

### Note Purchase Agreements and Amendments — Spain, Japan, and China (excerpts)

### Amendments to the Note Purchase Agreement between the Government of Japan and the IMF (Trustee)
- Context:
  - On April 20, 2017, the Government of Japan’s new loan contribution became effective when the Managing Director acknowledged the Ministry of Finance’s consent to the amendment of its borrowing agreement dated September 3, 2010.
- Key amendments to the NPA:
  - Amendment to total principal amount:
    - Paragraph 2(a) modified to: “Notes in a total principal amount of up to the equivalent of SDR 1,800 million 3.6 billion may be issued under this Agreement.”
  - Notice period, media of payment proposal, and monthly purchase limit:
    - Paragraph 2(b) modified; former paragraph 2(c) renumbered as 2(d); new paragraph 2(c) added.
    - Modified paragraph 2(b) specifies Trustee may issue and Purchaser shall purchase Notes at any time from the date this Agreement becomes effective through December 31, 2024.
    - Trustee shall give Purchaser at least five seven business days’ (Tokyo) notice of: (i) the Trustee’s intention to issue Notes including the amount, and (ii) subject to paragraph 5(a), the Trustee’s proposal for the media of payment for purchase; payment instructions provided at least two business days (Tokyo) prior to the value date by SWIFT.
    - New paragraph 2(c): “Unless otherwise agreed between the Purchaser and the Trustee, there will be no more than SDR 600 million purchased under this agreement in any calendar month. The provisions in this paragraph 2(c) do not apply to purchases under paragraph 3(ii).”
    - Paragraph 2(d): If principal or interest under a Note is not paid fully within ten days after its due date, the Trustee shall not issue further Notes pending consultations, but may resume issuances once arrears are discharged.
  - Media selection process (paragraph 5(a) modified):
    - Purchase price paid by transfer of SDRs, U.S. dollars or any other freely usable currency as may be agreed.
    - Trustee shall propose SDRs, U.S. dollars or any other freely usable currency as the media of payment in its notice under paragraph 2(b).
    - Purchaser deemed to consent unless within one business days from receipt Purchaser informs Trustee of preference for another media (SDRs, U.S. dollars or any other freely usable currency).
    - At least five business days (Tokyo) prior to issuance, Trustee shall send a final notice confirming media or cancelling initial notice if no agreement reached.
  - Payments (General Terms and Conditions, paragraph 7(a) modified):
    - Payments of interest on the Notes in SDRs, and payments of the principal amount under each Note in the same media originally used to purchase each Note.
    - Payments may be made in SDRs, or such currency as may be agreed; payments of principal pursuant to paragraph 6(b) shall be made in SDRs or a freely usable currency as determined by the Trustee after consultation.
    - Trustee shall give the Permitted Holder at least five business days’ (Washington DC) notice of intention to seek agreement for making interest payments in a media other than SDRs, or principal repayments in a media other than the media originally used to purchase each Note.

### Note Purchase Agreement between People’s Bank of China and the IMF (Trustee) — principal terms
- Purpose:
  - Purchaser agrees to purchase promissory notes issued in accordance with the PRGT Instrument and the terms of the Agreement and Annex I.
  - Agreement based on Section III, Paragraph 2 of the PRGT Instrument authorizing the Managing Director to enter into borrowing agreements for Loan Accounts of the Trust.
- Authorized issuance and term:
  - Paragraph 2(a): “Notes in a total principal amount of up to the equivalent of SDR 800 million may be issued under this Agreement.”
  - Paragraph 2(b): Trustee may issue and Purchaser shall purchase Notes from the date this Agreement becomes effective through December 31, 2024.
  - Trustee to give Purchaser at least five business days’ (Beijing) notice of intention to issue Notes and provide payment instructions at least two Fund business days prior to the value date by SWIFT.
  - Paragraph 2(c): If principal or interest not paid fully within ten days after due date, Trustee shall not issue further Notes pending consultations; issuances may resume once arrears discharged.
- Uses of proceeds (paragraph 3):
  - To finance (i) loan disbursements by the Trustee under the General Loan Account and (ii) early repayment pursuant to Section III, paragraph 4(b) of the PRGT Instrument of Trustee’s outstanding indebtedness under other borrowing agreements to any Loan Accounts of the Trust.
- Denomination, issue increments, and purchase price:
  - Notes denominated in SDR.
  - Notes issued in multiples of SDR 1,000; minimum amount of each issue SDR 1 million.
  - Purchase price for each Note shall be 100 percent of the principal amount.
- Media and exchange terms (paragraph 5):
  - Paragraph 5(a): Purchase price paid by transfer of renminbi (RMB) to an account specified by the Trustee unless otherwise agreed.
  - Paragraph 5(b): Purchases where purchase price is paid in currency and all exchanges made at the exchange rate for the relevant currency in terms of the SDR established pursuant to Article XIX, Section 7(a) for the second business day of the Fund before the value date.
  - Paragraph 5(c): If the Fund changes method of valuing the SDR, purchases, transfers and exchanges made three or more business days of the Fund after effective date of the change shall be made on basis of the new method.
- Suspension and transfer rights:
  - Issuance may be suspended at Purchaser’s request temporarily at any time prior to June 30, 2024, per Section III, paragraphs 4(c) and (d) of the Instrument.
  - Purchaser has right to transfer all or part of Notes held in accordance with Section VI of the PRGT Instrument and General Terms and Conditions (Annex I).
- Execution and effectiveness:
  - Any question arising under this Agreement settled by mutual agreement between Purchaser and the Trustee.
  - Agreement may be executed in duplicate counterparts; becomes effective on the last date written below.
- Signatures and dates recorded:
  - For the PEOPLE’S BANK OF CHINA: March 24, 2017 — YI Gang/s — Deputy Governor.
  - For the INTERNATIONAL MONETARY FUND, as TRUSTEE OF THE POVERTY REDUCTION AND GROWTH TRUST: April 21, 2017 — Christine Lagarde/s — Managing Director.

### Highlights from Annex I — General Terms and Conditions (People’s Bank of China)
- Definitions:
  - “Permitted Holder” means (i) Purchaser, (ii) a member of the Fund, (iii) the central bank or other fiscal agency designated by a member (“fiscal agency of a member”), and (iv) an official entity prescribed as a holder of SDRs (“prescribed SDR holder”).
- Form, delivery and custody (paragraph 2):
  - Notes issued only in book entry form; Trustee maintains book entry account recording number, issue date, principal amount, maturity date.
  - Registered Note may be issued on request in form in Annex II; Trustee will keep registered Notes in custody unless otherwise agreed.
- Maturity (paragraph 3):
  - Each Note shall have a maturity date six months from issue date unless otherwise provided.
  - Trustee may extend maturity in additional periods up to six months; Trustee deemed to have elected extension unless notified at least five business days (Washington) before maturity that Trustee does not elect to extend.
  - Maturity date shall not exceed maturity dates for loan disbursement under the facility for which it was issued.
  - Trustee will pay principal on applicable maturity date; if not a business day payment occurs next business day in place of payment.
  - Trustee may make early repayments with agreement of Permitted Holder.
  - Trustee will cancel Notes upon repayment and issue new Notes for remainder where appropriate.
- Rate of interest (paragraph 4):
  - Interest computed at annual rate determined by Trustee at time of each drawing and at six-month intervals thereafter from product of:
    - (i) interest rates on domestic instruments in each currency in the SDR basket as reported two LIBOR business days prior to commencement of interest period (or first preceding business day if not a Fund business day), including:
      - the bond equivalent yield for six-month U.S. Treasury bills,
      - the six-month Euro-denominated euro government bond yield for bonds rated AA and above, as published by the European Central Bank,
      - the bond equivalent yield on six-month Chinese treasury bills,
      - the bond equivalent yield on six-month Japanese treasury bills,
      - the six-month interbank rate in the United Kingdom,
    - (ii) the percentage weight of that currency in the valuation of the SDR on that business day, calculated using same amounts and exchange rates as used by the Fund for SDR valuation in terms of the U.S. dollar on that day.
  - Applicable interest rate is sum of the products, rounded to two decimal places; if calculation results in a negative interest rate, interest rate shall be zero percent.
  - Interest payable calculated on an actual day basis and paid semiannually promptly after June 30 and December 31.
- Transferability (paragraph 5):
  - Permitted Holder may transfer all or part of any Note to any member of the Fund, central bank or fiscal agency of a member, or a prescribed SDR holder.
  - Transferee must notify Trustee prior to transfer that it accepts obligations with respect to extensions of maturity and acquires rights of transferor.
  - Price of transferred Note as agreed between transferor and transferee.
  - Transfer recorded by Trustee and effective as of agreed value date upon recording.
  - Trustee will cancel transferred Note and, if registered, transferor must surrender registered Note for cancellation; Trustee will issue new Notes to transferee and transferor as applicable with same issue date and maturity date.
  - If transfer occurs during semiannual interest period, Trustee pays interest to transferee on principal amount for whole of that period.

### Key numeric figures and exact terms (verbatim)
- SDR 1,800 million
- 3.6 billion
- SDR 600 million
- five seven business days’ (Tokyo)
- two business days (Tokyo)
- ten days
- five business days’ (Washington DC)
- SDR 800 million
- December 31, 2024
- five business days’ (Beijing)
- two Fund business days
- SDR 1,000
- SDR 1 million
- 100 percent
- renminbi (RMB)
- June 30, 2024
- March 24, 2017
- April 21, 2017
- six months
- five business days (Washington)
- two LIBOR business days
- six-month U.S. Treasury bills
- six-month Euro-denominated euro government bond yield for bonds rated AA and above
- bond equivalent yield on six-month Chinese treasury bills
- bond equivalent yield on six-month Japanese treasury bills
- six-month interbank rate in the United Kingdom
- rounded to two decimal places
- zero percent
- June 30 and December 31

*International Monetary Fund — 2017 Borrowing Agreements—Spain, China and Japan (excerpts)*

### 6. Early Payment by the Trust at Request of Certain Permitted Holders.

### 6. Early Payment by the Trust at Request of Certain Permitted Holders.

### Scope of Permitted Holders
- The rights provided in subparagraph (b) shall apply only to a Permitted Holder that is:
  - (A) the Purchaser, or
  - (B) a member of the Fund or the central bank or other fiscal agency of a member of the Fund that has acquired the Notes by transfer if, at the time of such transfer, the balance of payments and reserve position of the member or Relevant Member, as the case may be, was considered sufficiently strong in the opinion of the Fund for its currency to be usable in transfers under the Financial Transactions Plan.

### Early payment procedure (subparagraphs (b) and related authority)
- If a Permitted Holder described in subparagraph (a) represents that its balance of payments and reserve position (the balance of payments and reserve position of the Relevant Member if the Permitted Holder is the central bank or other fiscal agency of a member or other official institution of a member) justifies early payment of all or part of the principal amount of the Permitted Holder’s Notes covered by subparagraph (a), and if the Trustee, having given this representation the overwhelming benefit of any doubt, agrees, then:
  - the Trust shall pursuant to Section III, paragraph 4(b) of the PRGT Instrument pay the principal amount of the Permitted Holder’s Notes covered by subparagraph (a) that is then outstanding,
  - up to the amount for which early payment has been requested, and
  - subject to the availability or resources under borrowing agreements to the Loan Accounts of the PRGT that authorize drawings for such early repayments.

### Media and modalities of payments on the Notes (paragraph 7)
- Payments by the Trustee of the principal amount of Notes and of interest on the Notes shall be made in renminbi (RMB), or in other media as may be agreed upon between the Permitted Holder and the Trustee; provided however that payments by the Trustee of principal pursuant to paragraph 6(b) shall be made in SDRs or a freely usable currency as determined by the Trustee after consultation with the Permitted Holder.
- All payments made by the Trustee to a Permitted Holder in currency will be made by crediting the amount due to an account specified in advance by the Permitted Holder for purposes of receiving such payments.
- Payments in SDRs will be made by crediting the SDR Department account of the Permitted Holder or of the Relevant Member as the case may be.

### Effective exchange rate for payments (paragraph 8)
- Unless otherwise agreed between a Permitted Holder and the Trustee, all payments in currency of principal and interest under these General Terms and Conditions will be made at the exchange rates for the relevant currencies in terms of the SDR 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 payment.

### Changes in method of valuation of SDR (paragraph 9)
- If the Fund changes the method of valuing the SDR, all transfers, exchanges, and payments of principal and interest made three or more business days of the Fund after the effective date of the change will be made on the basis of the new method of valuation.
- If there is a change in the currency composition of the SDR basket, the interest rate calculations and instruments under paragraph 4(a) shall be modified by operation of paragraph 9(a):
  - to (i) incorporate, for any new currency included in the SDR basket, the interest rate on a widely used six-month domestic instrument for such currency as determined by the Trustee after consultation with the Permitted Holder and
  - (ii) delete, for any currency removed from the SDR basket, the reference to the relevant domestic instrument.
- This modification shall be effective as of the date the changes in the method of valuing the SDR become effective.

### Settlement of questions (paragraph 10)
- Any question arising under any Note shall be settled by mutual agreement between the relevant Permitted Holder and the Trustee.

*pp050117new-prgt-loan-resources-from-china-japan-and-spain - 6. Early Payment by the Trust at Request of Certain Permitted Holders.*

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_Source: https://www.imf.org/-/media/files/publications/pp/pp050117new-prgt-loan-resources-from-china-japan-and-spain.pdf_