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

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**Canonical URL:** [Borrowing Agreement between Danmarks Nationalbank and the International Monetary Fund](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_110409.pdf)

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### Purposes and Amounts
- Danmarks Nationalbank agrees to lend to the Fund an SDR-denominated amount up to the equivalent of EUR 1.95 billion.
- The agreement is based on Article VII, Section 1(i) of the Articles of Agreement of the IMF and the Fund’s Guidelines on Borrowing, with borrowing to serve as a temporary supplement to quota resources.

### Term of the Agreement
- Fund may make drawings for a period of two years commencing on the date of the first drawing or October 31, 2009, whichever is earlier.
- Fund shall give at least five business days’ (Copenhagen) notice of intention to draw, and provide payment instructions at least two business days (Copenhagen) prior to the value date by SWIFT unless otherwise agreed.
- With Danmarks Nationalbank’s agreement, the Fund may extend the term for successive one-year periods for a total drawing period of up to four years, effective upon notice at least one month prior to expiration of the then current term.
- Danmarks Nationalbank may terminate the term if Denmark or its official institution becomes a participant in an enlarged and amended NAB that becomes effective after the date of this agreement.

### Uses, Estimates and Limits on Drawings
- Authorized uses after consultation with Danmarks Nationalbank:
  - (i) any use of Fund resources in the General Resources Account, or
  - (ii) payment of the Fund’s outstanding indebtedness under other official sector borrowing effected pursuant to Article VII, Section 1(i) where permitted by the terms of such other borrowing.
- Drawing limits unless otherwise agreed:
  - Not more than the equivalent of EUR 400 million during any calendar week.
  - Not more than the equivalent of EUR 1 billion during any calendar month.
  - Total outstanding drawings may not exceed EUR 1.95 billion at the time of any drawing.
- The Fund shall provide Danmarks Nationalbank prior to each quarter its best estimates of expected drawings for the forthcoming quarter and provide revised estimates during each quarter where warranted.

### Evidence of Indebtedness
- At Danmarks Nationalbank’s request, the Fund shall issue non-negotiable instruments evidencing indebtedness in a form agreed between the Fund and Danmarks Nationalbank.
- Upon repayment of any instrument and accrued interest, the instrument shall be returned for cancellation; if partially repaid a new instrument for the remainder shall be substituted with the same maturity date.

### Maturity and Repayment
- Standard maturity for each drawing: three months from the drawing date.
- Fund may extend maturity in additional periods of three months; the Fund is automatically deemed to have elected extensions for all drawings then outstanding unless it notifies Danmarks Nationalbank at least five business days (Copenhagen) before a maturity date that it does not elect to extend a particular drawing or portion thereof.
- No drawing’s maturity may be extended later than the fifth anniversary of its drawing date.
- Fund shall repay principal on the applicable maturity date.
- Fund may make early repayment in part or in full after notifying Danmarks Nationalbank at least five business days (Copenhagen) before such repayment.
- Repayments restore pro tanto the amount available for drawing; extensions do not reduce the available drawing amount.
- If a maturity date is not a business day in the place of payment, payment date is the next business day and interest accrues up to that payment date.

### Rate of Interest and Interest Payments
- 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 a higher interest rate on outstanding balances from any other comparable borrowing effected pursuant to Article VII, Section 1(i), the interest rate on drawings under this agreement shall be equivalent to that higher rate for as long as it remains in effect.
- Interest is calculated on the outstanding amount, accrues daily, and is paid promptly by the Fund after each July 31, October 31, January 31 and April 30.

### Denomination, Media and Modalities of Drawings and Payments
- All drawings and corresponding repayments are denominated in SDRs.
- Unless otherwise agreed, Danmarks Nationalbank shall pay each drawing by transfer of the SDR equivalent amount of Danish kroner to the Fund’s account at the designated depository of Denmark on the specified value date.
- Except as provided in paragraph 9 or otherwise agreed, principal repayments by the Fund shall be made in Danish kroner.
- Interest payments shall normally be made in SDRs; Fund and Danmarks Nationalbank may agree that interest payments will be made in Danish kroner.
- Payments in Danish kroner are made by crediting 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.

### Termination of Drawings and Early Repayment at Danmarks Nationalbank’s Request
- Danmarks Nationalbank’s commitment to meet drawings may be terminated at its request if:
  - (i) it represents that Denmark’s balance of payments and reserve position does not justify further drawings, and
  - (ii) the Fund, giving the representation the overwhelming benefit of any doubt, determines no further drawing should be made in light of Denmark’s position.
- Danmarks Nationalbank may request early repayment at face value of all or part of outstanding drawings if:
  - (i) it represents that Denmark’s balance of payments and reserve position justifies such repayment, and
  - (ii) the Fund, giving the representation the overwhelming benefit of any doubt, determines there is a need for early repayment as requested.
- After consultation the Fund may make repayments pursuant to paragraph 9 in SDRs or a freely useable currency as determined by the Fund.

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

### Effective Exchange Rate and Valuation
- Unless otherwise agreed, all drawings, exchanges, and payments under this agreement shall be made at the exchange rates for relevant currencies in terms of the SDR established pursuant to Article XIX, Section 7(a) and Fund rules for the second business day of the Fund before the value date of the transfer, exchange or payment.
- 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.
- For applying the drawing limits in paragraphs 1 and 3(b) and (c), the euro value of each SDR-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) for the second business day of the Fund before the value date. If that date is not a business day in Copenhagen, it shall be the last preceding business day of the Fund that is also a business day in Copenhagen.

### Changes in Method of Valuation of SDR
- If the Fund changes the method of valuing the SDR, 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
- The Fund agrees it will not take any action that would have the effect of making Danmarks Nationalbank’s claims under this agreement subordinate in any way to claims resulting from any other borrowing effected pursuant to Article VII, Section 1(i).

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

*Source: Borrowing Agreement between Danmarks Nationalbank and the International Monetary Fund, November 4, 2009.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_110409.pdf_