## Borrowing Agreement between Banco de Portugal and the International Monetary Fund — November 30, 2009

## Source details

**Canonical URL:** [Borrowing Agreement between Banco de Portugal and the International Monetary Fund — November 30, 2009](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_113009.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_113009.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_113009.pdf.json)

---

### Purposes and Amounts
- Banco de Portugal agrees to lend to the Fund an SDR-denominated amount up to the equivalent of EUR 1.06 billion.
- Agreement based on Article VII, Section 1(i) of the Articles of Agreement of the IMF and the Fund’s Guidelines on Borrowing; borrowing intended 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 December 31, 2009, whichever is earlier.
- Fund to give Banco de Portugal at least five business days’ (Lisbon) notice of intention to draw and provide payment instructions at least two business days (Lisbon) prior to the value date by SWIFT, unless otherwise agreed.
- With Banco de Portugal’s agreement, Fund may extend term for successive one-year periods for a total drawing period of up to four years, effective upon at least one month’s notice prior to expiration of the then current term.
- Banco de Portugal may terminate the term if Portugal or official Portuguese institutions participate in an enlarged and amended New Arrangements to Borrow (“NAB”) that becomes effective after the date of this agreement.

### Uses, Estimates and Limits on Drawings
- Fund may draw under this agreement in connection with (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 terms permit such use.
- Drawings limited to the equivalent of EUR 250 million during any calendar week, and not more than the equivalent of EUR 500 million during any calendar month, as calculated pursuant to paragraph 11(b), unless otherwise agreed.
- Total outstanding drawings under this agreement must not exceed EUR 1.06 billion at the time of any drawing, as calculated pursuant to paragraph 11(b).
- Fund shall provide Banco de Portugal prior to each quarter its best estimates of expected drawings for the forthcoming quarter and revised estimates during the quarter where warranted.

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

### Maturity
- Each drawing shall have a maturity date of three months from the drawing date, subject to extension by the Fund in additional periods of three months; such extensions are automatically deemed elected for all drawings unless the Fund gives written notice at least five business days (Lisbon) before a maturity date that it does not elect to extend a particular drawing.
- No maturity may be extended beyond the fifth anniversary of the date of such drawing.
- Fund shall repay principal on the applicable maturity date.
- Fund may make early repayment in part or in full after consultation with Banco de Portugal with at least five business days (Lisbon) written notice.
- Repayments restore pro tanto the amount that can be drawn; extensions of maturity do not reduce the available drawing amount.
- If maturity date is not a business day in the place of payment, payment date is the next business day in that place, with interest accruing up to the payment date.

### Rate of Interest
- Each drawing shall bear interest at the SDR interest rate established by the Fund pursuant to Article XX, Section 3; however, 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 payable under this agreement shall be equivalent to that higher rate for as long as it remains in effect.
- Interest calculated on the basis of the outstanding amount of the drawing, 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
- Drawings and corresponding repayments denominated in SDRs.
- Unless otherwise agreed, Banco de Portugal shall pay the SDR equivalent amount of Euros to the account of the Fund at the designated depository of Portugal on the value date specified in the Fund’s notice.
- Except as provided in paragraph 9 or by agreement, repayments of principal shall be made in Euros.
- Interest payments shall normally be made in SDRs; Fund and Banco de Portugal may agree interest payments in Euros.
- Euro payments by the Fund shall be credited to an account specified by Banco de Portugal; SDR payments credited to Portugal’s account in the Special Drawing Rights Department; payments in other currencies to an account specified by Banco de Portugal.

### Termination of Drawings at Request of Banco de Portugal
- Banco de Portugal’s commitment to meet drawings shall be terminated at its request if (i) Banco de Portugal represents that Portugal’s balance of payments and reserve position does not justify further drawings, and (ii) the Fund, giving that representation the overwhelming benefit of any doubt, determines no further drawing should be made in light of Portugal’s balance of payments and reserve position.

### Early Repayment at Request of Banco de Portugal
- Banco de Portugal may request early repayment at face value of all or part of outstanding drawings if (i) Banco de Portugal represents that Portugal’s balance of payments and reserve position justifies repayment, and (ii) the Fund, giving the representation the overwhelming benefit of any doubt, determines there is a need for early repayment in light of Portugal’s balance of payments and reserve position.
- After consultation, Fund may make repayments pursuant to paragraph 9 in SDRs or a freely usable currency as determined by the Fund.

### Transferability
- Banco de Portugal may not transfer obligations or claims under this agreement except with the Fund’s prior consent, subject to exceptions.
- Banco de Portugal may at any time transfer all or part of any claim to any member of the Fund, to the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes (“other fiscal agency”), or to any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3.
- Transferees assume liabilities regarding extension of maturity under paragraph 5(a) for transferred claims and hold claims on the same terms except:
  - (i) transferee may request early repayment under paragraph 9 only if it is a member or central bank or fiscal agency of a member and, at transfer time, the member’s balance of payments and reserve position is sufficiently strong in the opinion of the Fund for its currency to be used in transfers under the Financial Transactions Plan;
  - (ii) if transferee is a member or central bank or fiscal agency of a member, references to Euros in paragraph 7 deemed to refer to the transferee’s currency; otherwise deemed to refer to a freely usable currency determined by the Fund;
  - (iii) payments related to transferred claim made to an account specified by the transferee;
  - (iv) references to business days (Lisbon) deemed to refer to business days where the transferee is situated.
- Price of a transferred claim as agreed between Banco de Portugal and transferee.
- Banco de Portugal shall notify the Fund promptly of transfers including details: claim transferred, transferee name, amount, agreed price, and value date.
- Transfers notified under above shall be reflected in Fund records if in accordance with paragraph 10; effective as of value date agreed between Banco de Portugal and transferee.
- If claim transferred during a quarterly period as described in paragraph 6(b), Fund shall pay interest to the transferee on the transferred amount for the whole of that period.
- Fund shall assist in seeking to arrange transfers if requested.

### Effective Exchange Rate
- Unless otherwise agreed, all drawings, exchanges, and payments of principal and interest made at exchange rates for relevant currencies in terms of the SDR established pursuant to Article XIX, Section 7(a) and Fund rules and regulations 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 Lisbon, date shall be the last preceding business day of the Fund that is also a business day in Lisbon.
- 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) and Fund rules and regulations for the second business day of the Fund before the value date of the drawing; if not a business day in Lisbon, use the last preceding business day of the Fund that is also a business day in Lisbon.

### 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
- Fund agrees not to take any action that would have the effect of making Banco de Portugal’s claims under this agreement subordinate 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 Banco de Portugal and the Fund.

*Borrowing Agreement between Banco de Portugal and the International Monetary Fund — November 30, 2009*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_113009.pdf_