Obligation Seychelles Isles 8% ( XS0471464023 ) en USD

Société émettrice Seychelles Isles
Prix sur le marché refresh price now   100 %  ▼ 
Pays  Seychelles
Code ISIN  XS0471464023 ( en USD )
Coupon 8% par an ( paiement semestriel )
Echéance 31/12/2025



Prospectus brochure de l'obligation Seychelles XS0471464023 en USD 8%, échéance 31/12/2025


Montant Minimal 100 USD
Montant de l'émission 168 894 500 USD
Prochain Coupon 01/07/2025 ( Dans 30 jours )
Description détaillée Les Seychelles sont un archipel de 115 îles granitiques et coralliennes dans l'océan Indien, réputées pour leurs plages de sable blanc, leurs eaux turquoise et leur biodiversité exceptionnelle.

L'Obligation émise par Seychelles Isles ( Seychelles ) , en USD, avec le code ISIN XS0471464023, paye un coupon de 8% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 31/12/2025







PROSPECTUS DATED 7 DECEMBER 2009
REPUBLIC OF SEYCHELLES
Offer to Exchange
Republic of Seychelles U.S.$ Notes due 2016-2026
with Interest Rate Step-ups in 2012, 2015 and 2018 (the ``New Discount Notes'')
partially guaranteed by The African Development Bank (the ``Guarantor'')
or
Republic of Seychelles U.S.$ Notes due 2038-2041 (the ``New Par Notes'')
(the New Discount Notes and the New Par Notes are collectively referred to as the ``New Notes'')
for
Republic of Seychelles c54,750,000 Amortising Notes due 2011 (the ``Amortising Notes'') and
Republic of Seychelles U.S.$230,000,000 9.125 per cent. Notes due 2011 (the ``2011 Notes'')
(collectively, the ``Existing Notes'')
and/or
Republic of Seychelles Loans (as defined in the section entitled ``Terms of Exchange Offer'') (``Existing Loans'') (the Existing Notes and Existing Loans are collectively referred to as the
``Existing Instruments'')
The Republic of Seychelles hereby invites the holders of Existing Instruments to tender all or any of their Existing Instruments for either or both series of the New Notes upon the terms
and conditions set out in this Prospectus in the section entitled ``Terms of Exchange Offer'' (the ``Exchange Offer''). The New Notes will be general, direct, unconditional, unsubordinated
and unsecured obligations of the Republic of Seychelles and will rank at least pari passu with all other existing and future unsubordinated and unsecured obligations of the Republic of
Seychelles.
The principal amount of New Discount Notes and New Par Notes to be exchanged for the Existing Instruments together with all accrued and unpaid interest thereon will be as follows:
New Discount Notes
New Par Notes
For each U.S.$1,000 principal amount of 2011 Notes tendered:
U.S.$500
or
U.S.$1,000
For each c1,000 Relevant Amount (as defined in the section entitled ``Terms of Exchange Offer'') of Amortising Notes tendered:
U.S.$748.35
or
U.S.$1,496.70
For each U.S.$1,000 principal amount of U.S. dollar denominated Existing Loans tendered:
U.S.$500
or
U.S.$1,000
Any Existing Instruments denominated in a currency not referred to above will be translated into U.S. dollars at the rates set out in the section entitled ``Terms of Exchange Offer-
Principal Amount of New Notes to be Received by Holders pursuant to the Exchange Offer''. Any tenders of Existing Notes may only be made in integral multiples of U.S.$1,000 or c1,000.
The issue price of the New Notes is 100 per cent. of their principal amount.
Unless previously redeemed or cancelled, the New Discount Notes will be redeemed in 20 equal semi-annual instalments commencing on 1 July 2016. The New Discount Notes may also
be redeemed at par at the option of the Republic of Seychelles, in whole or in part, on any principal repayment date.
Unless previously redeemed or cancelled, the New Par Notes will be redeemed in 7 equal semi-annual instalments commencing on 1 July 2038. The New Par Notes may also be redeemed
at par at the option of the Republic of Seychelles, in whole or in part, on any principal repayment date.
Holders of each series of Existing Notes, by tendering such notes to participate in the Exchange Offer and submitting an Exchange Instruction in respect of such notes, will be giving
instructions to the relevant Clearing System to instruct Citibank Europe PLC (and any affiliate thereof holding the Permanent Global Note of each series of Existing Notes) as holder of
the global note of the relevant series of Existing Notes to vote in favour of the Extraordinary Resolutions in substantially the form as set out in the section entitled ``Form of Notices and
Extraordinary Resolutions'' at any meeting of Holders of the relevant series of Existing Notes duly convened in accordance with the terms and conditions of such notes (a ``Meeting of
Holders'') held on or prior to the Settlement Date. The Republic of Seychelles may choose on or about the Expiration Date to convene such a Meeting of Holders in respect of the
Amortising Notes and/or the 2011 Notes to sanction the exchange of the 2011 Notes and Amortising Notes, as applicable, for that series of New Notes which will have the largest
aggregate principal amount following consummation of the Exchange Offer (the ``Larger Series of New Notes''). It is anticipated that Citibank Europe PLC will appoint Citibank, N.A. as
proxy to vote in favour of any Extraordinary Resolutions held at any duly convened Meetings of Holders. If the Extraordinary Resolution for the exchange of a series of Existing Notes
for such New Notes is passed at the relevant Meeting of Holders, holders of Existing Notes who do not participate in the Exchange Offer will hold, as of the Settlement Date, the Larger
Series of New Notes.
The Guarantor has agreed to guarantee on a partial basis the payment of interest due and payable by the Republic of Seychelles in respect of the New Discount Notes, subject to an
aggregate guarantee maximum amount of $10 million. The Guarantor is only required to make payment under the Guarantee in the event the Republic of Seychelles fails to make an
interest payment on an Interest Payment Date in respect of the New Discount Notes and a demand under the Guarantee is delivered to the Guarantor in respect thereof. Amounts
payable by the Guarantor under the Guarantee do not include principal, costs, fees, expenses and other amounts as more particularly described in the Deed of Guarantee or any payment
of interest that in aggregate exceeds U.S.$10,000,000.
From, and including, 1 January 2010 to, but excluding, 1 January 2012 (the ``New Discount Notes Initial Interest Term''), the New Discount Notes bear interest at the rate of 3 per cent.
per annum. From, and including, 1 January 2012 to, but excluding 1 January 2015 (the ``New Discount Notes First Step-up Interest Term''), the New Discount Notes bear interest at the
rate of 5 per cent. per annum. From, and including, 1 January 2015 to, but excluding 1 January 2018 (the ``New Discount Notes Second Step-up Interest Term''), the New Discount Notes
bear interest at the rate of 7 per cent. per annum. Thereafter, from, and including, 1 January 2018 to, but excluding 1 January 2026 (the ``New Discount Notes Third Step-up Interest
Term''), the New Discount Notes bear interest at the rate of 8 per cent. per annum. Interest during the New Discount Notes Initial Interest Term, the New Discount Notes First Step-up
Interest Term, the New Discount Notes Second Step-up Interest Term and the New Discount Notes Third Step-up Interest Term is payable in two equal instalments semi annually in
arrears on 1 January and 1 July in each year, the first such interest payment date being 1 July 2010, subject as provided in ``Terms and Conditions of the New Discount Notes ­
Payments''.
From, and including, 1 January 2010 to, but excluding, 1 July 2041, the New Par Notes bear interest at the rate of 2.0 per cent. per annum. Interest on the New Par Notes is payable in
two equal instalments semi annually in arrears on 1 January and 1 July in each year, the first such interest payment date being 1 July 2010, subject as provided in ``Terms and Conditions
of the New Par Notes ­ Payments''.
The New Discount Notes will include a goodwill payment of U.S.$10.44 per U.S.$100 face amount thereof payable on 12 April 2010. The New Par Notes will include a goodwill payment
of U.S.$5.22 per U.S.$100 face amount thereof payable on 12 April 2010. Payments on the New Notes will be made in U.S. dollars without deduction for or on account of taxes imposed
or levied by the Republic of Seychelles to the extent described under ``Terms and Conditions of the New Par Notes ­ Taxation'' or ``Terms and Conditions of the New Discount Notes ­
Taxation'' as applicable.
This Prospectus, the related Letter of Transmittal as set out in Annex A, the Exchange Instructions, the form of Guarantee as set out in Annex B and the Extraordinary Resolutions as
set out in the section entitled ``Form of Notices and Extraordinary Resolutions'' are together referred to as the ``Exchange Offer Materials''.
Each holder of Existing Notes may only participate in the Exchange Offer by delivering Exchange Instructions which have been properly completed and executed in accordance with the
relevant instructions set out in the section entitled ``Exchange Offer Procedures''. Each holder of Existing Loans may only participate in the Exchange Offer by delivering a Letter of
Transmittal (as set out in Annex A) to Citibank, N.A. (the ``Exchange Agent'') at the address specified in the Letter of Transmittal by hand, e-mail, courier, mail or facsimile transmission
in accordance with the relevant instructions set out in the section entitled ``Exchange Offer Procedures''. All such holders are referred to as ``Holders''. Exchange Instructions and Letter of
Transmittal must be delivered no later than 5:00pm, London time, on 14 January 2010 (or such other date as determined by the Republic of Seychelles as a result of an extension of the
Exchange Offer).
The Republic of Seychelles will only issue New Par Notes if the principal amount of New Par Notes to be exchanged for the Existing Instruments is at least U.S.$50,000,000. If the
principal amount of New Par Notes which would be exchanged for the Existing Instruments is less than U.S.$50,000,000, each Holder of Existing Loans and each Holder of Existing
Notes that has tendered for New Par Notes will be automatically deemed to have tendered its Existing Loans and Existing Notes exclusively for New Discount Notes upon the terms and
subject to the conditions applicable to New Discount Notes as set out in the Exchange Offer Materials.
The Republic of Seychelles may, in circumstances more particularly described in the section entitled ``Terms of Exchange Offer ­ Termination of Exchange Offer'', terminate the Exchange
Offer in which case all Tenders by Holders of Existing Loans or Existing Notes and associated Exchange Instructions will be legally null and void.
Participation in the Exchange Offer involves a degree of risk which is described in more detail in the section entitled ``Risk Factors''.
This Prospectus has been approved by the United Kingdom Financial Services Authority (the ``FSA''), which is the United Kingdom competent authority for the purposes of Directive
2003/71/EC (the ``Prospectus Directive'') and relevant implementing measures in the United Kingdom as a prospectus issued in compliance with the Prospectus Directive and relevant
implementing measures in the United Kingdom for the purpose of giving information with regard to the issue of the New Notes. Applications have been made for a certificate of
approval under Article 18 of the Prospectus Directive as implemented in the United Kingdom to be issued by the FSA to the competent authority in Austria, France, Germany, Italy,
Luxembourg and Portugal and for the New Notes to be admitted to listing on the Official List of the FSA and to trading on the Regulated Market of the London Stock Exchange plc
(the ``London Stock Exchange''). The Regulated Market of the London Stock Exchange is a regulated market for the purposes of Directive 2004/39/EC on markets in financial
instruments.
The New Notes have not been, and will not be, registered under the United States Securities Act of 1933 (the ``Securities Act'') and are subject to United States tax law requirements. The
New Notes are being offered outside the United States in accordance with Regulation S under the Securities Act (``Regulation S''), and may not be offered, sold or delivered within the
United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act.
The New Discount Notes and the New Par Notes will each be in bearer form and in the denomination of U.S.$100 each. The New Discount Notes and the New Par Notes will each
initially be in the form of a temporary global note (each a ``Temporary Global Note''), without interest coupons, which will be deposited on or around 11 February 2010 (the ``Settlement
Date'') with a common depositary for Euroclear Bank SA/NV (``Euroclear'') and Clearstream, Luxembourg, socie´te´ anonyme (``Clearstream, Luxembourg''). Each Temporary Global Note
will be exchangeable, in whole or in part, for interests in a permanent global note (each a ``Permanent Global Note''), without interest coupons, not earlier than 40 days after the
Settlement Date upon certification as to non-U.S. beneficial ownership. Interest payments in respect of the New Notes cannot be collected without such certification of non-U.S. beneficial
ownership. Each Permanent Global Note will be exchangeable in certain limited circumstances in whole, but not in part, for the relevant New Notes in definitive form in the
denomination of U.S.$100 each and with interest coupons attached. Please refer to the sections entitled ``Form and Transfer of New Discount Notes'' and ``Form and Transfer of New Par
Notes''.
THIS OFFER TO EXCHANGE WILL EXPIRE AT 5:00PM, LONDON TIME, ON 14 JANUARY 2010, UNLESS EXTENDED IN ACCORDANCE WITH THE TERMS AS SET
FORTH HEREIN (THE ``EXPIRATION DATE'')
Custodians, direct participants and clearing systems might have deadlines prior to the Expiration Date for receiving instructions and should be contacted as soon as possible to ensure proper
and timely delivery of instructions.
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IMPORTANT NOTICES
The Republic of Seychelles (the ``Issuer'') accepts responsibility for the information contained in this Prospectus and
declares that, having taken all reasonable care to ensure that such is the case, the information contained in this
Prospectus to the best of its knowledge is in accordance with the facts and contains no omission likely to affect its
import.
The Issuer has not made any investigation concerning the information relating to the Guarantor contained in this
Prospectus. The Issuer, therefore, makes no representations, warranties or assurances of any nature as to the accuracy,
completeness or sufficiency of such information and assumes no responsibility with respect to that information.
The Issuer, having made all reasonable enquiries, confirms that this Prospectus contains all information regarding the
Issuer and the New Notes which is (in the context of the issue of the New Notes) material; such information is true
and accurate in all material respects and is not misleading in any material respect; any opinions, predictions or
intentions expressed in this Prospectus on the part of the Issuer are honestly held or made and are not misleading in
any material respect; this Prospectus does not omit to state any material fact necessary to make such information,
opinions, predictions or intentions (in such context) not misleading in any material respect; and all proper enquiries
have been made to ascertain and to verify the foregoing.
The Issuer has not authorised the making or provision of any representation or information regarding the Issuer or the
New Notes other than as contained in this Prospectus or as approved for such purpose by the Issuer. Any such
representation or information should not be relied upon as having been authorised by the Issuer.
The Guarantor accepts responsibility for the information contained or referred to in this Prospectus relating to the
Guarantor and the Guarantee. The Guarantor has made no investigation concerning any other information contained in
this Prospectus and makes no representations, warranties or assurances of any nature as to the accuracy, completeness
or sufficiency of any such information and assumes no responsibility with respect to such information.
Neither the delivery of this Prospectus nor the offering, sale or delivery of any New Note shall in any circumstances
create any implication that there has been no adverse change, or any event reasonably likely to involve any adverse
change, in the condition of the Republic of Seychelles since the date of this Prospectus. Unless otherwise indicated, all
information in this Prospectus is given as of its date. This Prospectus may only be used where it is legal to offer and
sell these securities.
No person should consider this Prospectus as a recommendation by the Issuer to participate in the Exchange Offer. In
making an investment decision, persons should rely on their own examination and evaluation of the Issuer and the
terms of the Exchange Offer, including the merits and risks involved. Persons should consult their own advisors as
needed to make any investment decision and as to whether they are legally permitted to acquire the New Notes in the
Exchange Offer under applicable legal investment or similar laws or regulations.
None of the Exchange Agent, Information Agent, the Syndicate Agent, the Paying Agent, the Guarantor nor the
Trustee for these purposes, (together, the ``Agents'') makes any representation regarding this Prospectus or the New
Notes or any recommendation that Holders of Existing Instruments should tender or refrain from tendering them for
New Notes pursuant to the Exchange Offer, and no one has been authorised by any Agent to make any such
recommendation.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of, the Issuer or any agency thereof in
any jurisdiction where an offer or invitation by or on behalf of the Issuer or any agency thereof is not permitted by the
laws of such jurisdiction. Persons into whose possession this Prospectus comes should inform themselves of and observe
any such restrictions. For a description of certain restrictions on offers, sales and deliveries of New Notes and on
distribution of this Prospectus and other offering material relating to the New Notes, please refer to the section entitled
``Jurisdictional Restrictions''. The Issuer does not accept any liability for its own failure or the failure of any other
person or persons to comply with the provisions of any such restrictions.
In particular, the New Notes have not been and will not be registered under the Securities Act and are subject to
United States tax law requirements. Subject to certain exceptions, New Notes may not be offered, sold or delivered
within the United States or to U.S. persons.
This Prospectus is being delivered only to Holders of the Existing Instruments and is not an offer to any other person
or the public generally. The Issuer does not authorise the distribution of this Prospectus to any person other than a
Holder of Existing Notes or Existing Loans or an advisor to such Holder or its custodian, direct
participant and clearing system, except to the extent required by the rules and regulations of the London Stock
Exchange.
Holders of Existing Instruments who tender any of their Existing Notes or Existing Loans will, by doing so, make
certain representations, warranties, acknowledgements and consents and undertake to perform certain covenants, as
more particularly described in the section entitled ``Terms of Exchange Offer ­ Representations, Warranties,
Acknowledgements and Covenants of Holders''.
In this Prospectus, unless otherwise specified, references to a ``Member State'' are references to a Member State of the
European Economic Area, all references to ``dollar'', ``U.S.$'' and ``$'' are to the lawful currency of the United States of
America, references to ``euro'', ``Euro'' and ``e'' are to the lawful currency of the European Monetary Union and
references to ``rupee'' and ``R'' are to the lawful currency of Seychelles.
Except as otherwise provided in this Prospectus, translations of amounts from one currency into another currency are
solely for the convenience of the reader and are made at the exchange rates specified in the section entitled ``Terms of
Exchange Offer ­ Principal Amount of New Notes to be Received by Holders pursuant to the Exchange Offer''.
Except as otherwise provided herein, any reference in this Prospectus to an action being taken by the Republic of
Seychelles should be construed as a reference to such action being taken by the Ministry of Finance acting on behalf of
the Republic of Seychelles.
Certain figures included in this Prospectus have been subject to rounding adjustments; accordingly, figures shown for the
same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures which precede them.
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CONTENTS
Page
IMPORTANT NOTICES .......................................................................................................
ii
LETTER OF SUPPORT ­ MINISTER OF FINANCE .......................................................
1
SUMMARY ............................................................................................................................
3
SUMMARY OF TIMETABLE..............................................................................................
8
TERMS OF EXCHANGE OFFER .......................................................................................
9
EXCHANGE OFFER PROCEDURES.................................................................................
21
TERMS AND CONDITIONS OF NEW DISCOUNT NOTES...........................................
24
TERMS AND CONDITIONS OF NEW PAR NOTES .......................................................
33
FORM OF NOTICES AND EXTRAORDINARY RESOLUTIONS .................................
42
RISK FACTORS ....................................................................................................................
50
REPUBLIC OF SEYCHELLES .............................................................................................
57
SEYCHELLES ECONOMY...................................................................................................
62
MONETARY AND FINANCIAL SYSTEM ........................................................................
76
PUBLIC FINANCE................................................................................................................
81
THE AFRICAN DEVELOPMENT BANK ..........................................................................
90
FORM AND TRANSFER OF NEW DISCOUNT NOTES ................................................
92
FORM AND TRANSFER OF NEW PAR NOTES .............................................................
93
TAXATION ............................................................................................................................
94
JURISDICTIONAL RESTRICTIONS ..................................................................................
96
GENERAL INFORMATION ................................................................................................
104
ANNEX A
PART I INSTRUCTIONS FOR COMPLETION AND SUBMISSION OF
LETTERS OF TRANSMITTAL FOR EXCHANGE OF EXISTING
LOANS ..............................................................................................................
106
PART II PRO FORMA LETTER OF TRANSMITTAL FOR EXCHANGE
OF EXISTING LOANS ...................................................................................
108
ANNEX B
FORM OF GUARANTEE ...............................................................................
115
ANNEX C
INFORMATION STATEMENT OF THE GUARANTOR...........................
128
ANNEX D
INDEX OF CERTAIN DEFINITIONS..........................................................
250
iii


Republic of Seychelles
Ministry of Finance
The Minister
LETTER OF SUPPORT ­ MINISTER OF FINANCE
To: Holders of Existing Notes and Existing Loans (collectively referred to as `Existing Instruments')
7 December 2009
Ladies and Gentlemen,
The launch of the exchange offer that is described in the attached Prospectus marks the conclusion of
extensive discussions between the Government of Seychelles and holders of the Existing Instruments
and their representatives. These discussions, which began just over one year ago, have focused on
identifying credible solutions to Seychelles' extreme debt overhang in the context of our IMF-
sponsored economic reform programme.
Our debt overhang was brought into sharp focus by the major macroeconomic crisis that unfolded in
Seychelles in early 2008. The origins of this crisis can be found in the inconsistent policies that were
pursued over many years, and which eventually generated unmanageable twin deficits and major
macroeconomic distortions. As we struggled with the consequences of sluggish growth and chronic
shortages of foreign exchange, we engaged in a series of debt refinancing operations in order to
sustain ourselves and contain a growing external arrears problem.
Because these refinancing operations increased both the quantum and the cost of our public debt, we
must acknowledge that they were, in retrospect, ill-advised. Ultimately, foreign financing could not
protect us from our own failure to let our exchange rate adjust, and to encourage the private sector
to compete with state enterprises. What little reserve cover we had was quickly exhausted when world
prices of oil and of the food staples on which we depend rose rapidly in late 2007 and early 2008,
forcing us to miss payments across all categories of external debt.
It is no exaggeration to say that today Seychelles is in a process of fundamental transformation. In
November 2008 we embarked on a comprehensive and heavily front-loaded economic reform
programme that is being supported by our first-ever arrangement with the IMF. Reflecting our
commitment to tackling the root of our economic problems, the radical programme was launched
with the immediate flotation of the Seychelles rupee and the announcement of a 18 per cent.
reduction in the public sector workforce.
These irreversible changes have been quick to bear fruit. Our major macroeconomic indicators have
stabilised, and we now expect our primary surplus for 2009 to be one of the highest in the world
amongst non-oil producing countries. This is no small feat considering the massive contraction that
our economy continues to experience. Our determination to set our house in order against a very
difficult backdrop has enabled us to meet the targets under our Stand-by Arrangement with the IMF
with margins, and has secured the support of key development partners such as the African
Development Bank and the World Bank.
Although we are encouraged by the results to date, we know that we cannot stop here. This is why
the IMF Executive Board will shortly be considering our request to substitute the Stand-by
Arrangement with a three-year Extended Fund Facility. This new programme of tough, structural
reforms will enable us to build on the recent stabilisation and create the conditions for sustained
recovery.
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Just as we know that there can be no turning back, we also recognise that our economic and
financial rehabilitation will remain incomplete until our debt is placed firmly on a sustainable footing.
Today Seychelles is burdened with one of the highest debt overhangs in the world, and the
projections that we have shared with you clearly indicate that we are unable to repay our external
debt on existing terms despite our concerted reform efforts.
It was this drastic mismatch between our debt commitments and our forecast payment capacity that
ultimately persuaded the Paris Club group of creditor countries to grant Seychelles exceptional debt
reduction terms in April 2009. With the conclusion of this unprecedented agreement, a number of
countries that are not members of the Paris Club have agreed to apply the Paris Club terms to their
claims on Seychelles. Against this backdrop of official international community support, we must now
seek the support of our external commercial creditors in order to close projected financing gaps and
comply with our commitment to the principle of inter-creditor equity.
The discussions that we have held with you and your representatives over the last year have enabled
us to gain a better understanding of your preferences and limitations. It is our view that they have
also helped us to communicate the scale and nature of our constraints. We believe that progress has
been made towards finding common ground, and that the terms of the exchange offer as described in
the attached Prospectus reflect compromise and accommodation on the part of both sides.
Seychelles does not intend to make any further exchange offers in respect of the Existing Instruments.
In designing the terms that are detailed in the Prospectus, we have sought to make the best possible
offer that is within our means. I would like to point out that we have succeeded in securing a partial
guarantee on interest payments from the African Development Bank in the case of one of the options
available under the exchange offer. This credit enhancement feature will provide additional value to
holders of Existing Instruments selecting the relevant option in a way that does not place undue
pressure on future cash flows.
Of course, Seychelles recognises that even with this partial guarantee, the terms of our exchange offer
remain extremely tough. They are tough because they reflect our economic and financial reality.
Regrettably, the need for deep debt relief is something that we simply cannot escape.
As you review the terms of the attached Prospectus, I can only ask that you look forward with us. It
is our firm belief that the successful completion of this exchange offer and the relentless
implementation of reforms to which we are committed will succeed in placing our finances on a
viable path, enabling us to rebuild trust and establish a level of creditworthiness that is well beyond
what we have known in the past.
We are grateful for the continued support from our creditors, and encourage you to respond to the
exchange offer within the time frame specified in the Prospectus.
Sincerely yours,
Danny Faure
Minister of Finance
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SUMMARY
This summary must be read as an introduction to the prospectus of the Republic of Seychelles dated
7 December 2009 (the ``Prospectus'') and any decision to participate in the Exchange Offer should be
based on a consideration of the Prospectus as a whole. Following the implementation of the relevant
provisions of the Prospectus Directive (Directive 2003/71/EC) in each Member State of the European
Economic Area, no civil liability will attach to the responsible persons in any such Member State solely
on the basis of this summary, including any translation hereof, unless it is misleading, inaccurate or
inconsistent when read together with the other parts of the Prospectus. Where a claim relating to the
information contained in the Prospectus is brought before a court in a Member State of the European
Economic Area, the plaintiff may, under the national legislation of the Member State where the claim is
brought, be required to bear the costs of translating the Prospectus before the legal proceedings are
initiated.
Words and expressions defined in the ``Terms and Conditions of the New Discount Notes'' and the
``Terms and Conditions of the New Par Notes'' below or elsewhere in this Prospectus have the same
meaning in this summary.
Issuer
Republic of Seychelles (``Seychelles'')
Seychelles consists of 115 islands in the Indian Ocean. Independence was
granted in 1976 from the United Kingdom as a republic within the
Commonwealth. The head of state is the president and the ruling political
party of Seychelles is currently the Seychelles People's Progressive Front.
At the end of 2005, the estimated population of Seychelles was 82,717.
Since independence, the government of Seychelles has sought to provide
economic growth, a good welfare state and improved income
distribution. Tourism, the activities of the Seychelles Petroleum
Company, financial services and fishing are the principal sectors of the
economy in terms of government revenue.
The table below shows a number of key statistics for the years 2004 to
20081.
2004
2005
2006
2007
2008
GDP at 2006 Current Market Prices
(R millions) ..............................................
4,695.7
5,043.2
5,628.3
6,877.0
8,755.7
Inflation Rate (in per cent.) ........................
3.9
0.7
-1.9
5.3
37.0
Total External Debt (U.S.$ millions) ..........
448
486
521
710
763
External Debt Service (U.S.$ millions) .......
184
71
102
87
118
External Debt as per cent. of Exports ........
220.9
195.8
237.6
289.0
328.7
External Debt as per cent. of GDP ............
52.0
53.0
51.1
69.2
93
Sources: Central Bank of Seychelles, National Statistics Bureau (``NSB''), Department of Employment,
the Ministry of Finance, and IMF.
Note:
1
NSB only produces annual GDP figures.
The public debt burden of Seychelles is unsustainable. Seychelles is
undertaking an extensive debt reform programme to address this issue.
Seychelles is currently supported by a standby arrangement with the
International Monetary Fund and recently obtained exceptional debt
relief from the Paris Club and further relief will be granted if certain
conditions are met.
In relation to the 2011 Notes, an interest payment of U.S.$10,493,750
was missed on October 2008 and further interest payments for the same
amount were missed in April 2009 and October 2009. Seychelles has not
made payments on the Amortising Notes since July 2008.
The Guarantor of the New
The African Development Bank (``AFDB'') is providing a partial
Discount Notes
guarantee (see ``Deed of Guarantee'' below). AFDB is a public
international body established in 1963 and has 52 African and 24 non-
African state members. The main goal of AFDB is to promote sustained
growth and reduce poverty in Africa.
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Exchange Offer
Seychelles invites holders (``Holders'') of:
(a)
c54,750,000 Amortising Notes due 2011 (``Amortising Notes'');
(b)
U.S.$230,000,000 9.125 per cent. Notes due 2011 (``2011 Notes'')
((a) and (b) are collectively the ``Existing Notes'');
(c)
the Term Loan Agreement dated 22 March 1999 as amended and
restated on 23 March 2004 between Seychelles Marketing Board,
Seychelles and ABN AMRO Bank N.V.; and
(d)
the Facility Agreement dated 2 June 2003 between Public Utilities
Corporation of Seychelles, Central Bank of Seychelles, Seychelles,
ABN AMRO Bank N.V. (the ``Syndicate Agent''), Commerzbank
(Nederland)
N.V.
and
Coo¨peratieve
Centrale
Raiffeisen
Boerenleenbank B.A. ((c) and (d) are collectively the ``Existing
Loans'') and (a), (b), (c) and (d) are collectively the ``Existing
Instruments''),
to tender all or any of their Existing Instruments for either (i) U.S.$
Notes due 2016-2026 with Interest Rate Step-ups in 2012, 2015 and 2018
(``New Discount Notes'') or (ii) U.S.$ Notes due 2038-2041 (``New Par
Notes'') (together ``New Notes'') upon the terms and conditions as set out
in the Prospectus (``Exchange Offer''). The Exchange Offer will expire at
5:00pm, London time, on 14 January 2010, unless extended by Seychelles
(``Expiration Date'').
Each Holder of Existing Notes may only participate in the Exchange
Offer by delivering Exchange Instructions which have been properly
completed and executed in accordance with the relevant instructions set
out in ``Exchange Offer Procedures''.
Each Holder of Existing Loans may only participate in the Exchange
Offer by delivering a letter of transmittal (as set out in Annex A of the
Prospectus) on or prior to the Expiration Date to Citibank, N.A. at the
address specified in the relevant letter of transmittal in accordance with
the relevant instructions set out in ``Exchange Offer Procedures''.
Condition to issuance of New
Seychelles will only issue New Par Notes if the Exchange Agent has
Par Notes
received valid tenders which would result in a principal amount of at least
U.S.$50,000,000 being issued (the ``New Par Notes Minimum Tender
Condition''). If the New Par Notes Minimum Tender Condition is not
satisfied, Seychelles will provide written notice thereof to Holders by
issuing a press release to the Reuters News Service and the Clearing
Systems and each Holder that has tendered for New Par Notes will be
automatically deemed to have tendered exclusively for New Discount
Notes upon the terms and subject to the conditions as set out in the
Prospectus.
Eligible tenders
Seychelles may reject, in its sole discretion, tenders, including tenders not
in proper form or the acceptance of which would, in the opinion of
Seychelles' counsel, be unlawful.
Irrevocability
Save as provided in ``Terms of Exchange Offer ­ Irrevocability'', any
tender of Existing Instruments will be irrevocable and cannot be
withdrawn without the prior written consent of Seychelles.
Representations and
Holders who tender any of their Existing Instruments will, by doing so,
Warranties
make certain
representations,
warranties,
acknowledgements and
covenants, as more particularly described in ``Terms of Exchange Offer
­ Representations, Warranties, Acknowledgements and Covenants of
Holders''.
Extraordinary Resolution ­
Holders of each series of Existing Notes, by tendering such notes to
Exchange of Existing Notes
participate in the Exchange Offer and submitting an electronic
instruction in respect of such notes, will be giving instructions to the
relevant Clearing System to instruct Citibank Europe PLC (and any
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relevant affiliate thereof) to vote in favour of the Extraordinary
Resolutions substantially in the form as set out in ``Form of Notices
and Extraordinary Resolutions'' at any Meeting of Holders duly convened
on or prior to the Settlement Date in respect of the Amortising Notes and
2011 Notes to sanction the exchange of each of the 2011 Notes and
Amortising Notes for the series of New Notes which has the largest
aggregate principal amount as at the Expiration Date. If the applicable
Extraordinary Resolution for such exchange is passed, holders of
Existing Notes who do not participate in the Exchange Offer will hold,
as of the Settlement Date, that series of New Notes.
New Notes
The principal amount of New Discount Notes and New Par Notes to be
exchanged for the Existing Instruments together with all accrued and
unpaid interest thereon will be as follows:
New Discount Notes
New Par Notes
For each U.S.$1,000 principal amount
of 2011 Notes tendered:
U.S.$500
or
U.S.$1,000
For each c1,000 Relevant Amount (as
defined in the section entitled ``Terms
of Exchange Offer'') of Amortising
Notes tendered:
U.S.$748.35
or
U.S.$1,496.70
For each U.S.$1,000 principal amount
of U.S. dollar denominated Existing
Loans tendered:
U.S.$500
or
U.S.$1,000
Any Existing Instruments denominated in a currency not referred to
above will be translated into U.S. dollars at the rates set out in the section
entitled ``Terms of Exchange Offer ­ Principal Amount of New Notes to be
Received by Holders pursuant to the Exchange Offer''. Any tenders of
Existing Notes may only be made in integral multiples of U.S.$1,000 or
c1,000.
Deed of Guarantee
If Seychelles fails to make payments of interest under the New Discount
Notes, the Guarantor guarantees, on a partial basis, to the Trustee on
behalf of Holders of such notes, such amounts of interest due and
payable, subject to an aggregate guarantee maximum amount of U.S.$10
million.
The guarantee is a senior, unsubordinated, unconditional and unsecured
obligation of the Guarantor.
Status of Seychelles'
The Guarantor has agreed with Seychelles that Seychelles' obligation to
Reimbursement Obligations
reimburse the Guarantor for any payments made under the Guarantee
shall be converted into a loan repayable no later than 2029.
Trustee
Deutsche Trustee Company Limited.
Issue Date
Expected to be on or about 11 February 2010.
Interest
(A)
New Discount Notes
From and including
To and excluding
Interest Rate per annum
1 January
1 January
(per cent.)
2010
2012
3
2012
2015
5
2015
2018
7
2018
2026
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(B)
New Par Notes
From and including 1 January 2010 to, but excluding, 1 July 2041, the
New Par Notes bear interest at the rate of 2.0 per cent. per annum.
Interest for each period of the New Notes as specified above is payable in
two equal instalments semi annually in arrears on 1 January and 1 July in
each year, starting in 1 July 2010, subject as provided in ``Terms and
Conditions of the New Discount Notes ­ Payments'' and ``Terms and
Conditions of the New Par Notes ­ Payments''.
Goodwill Payment
Seychelles shall make payments of U.S.$10.44 per U.S.$100 face amount
on 12 April 2010 to holders of the New Discount Notes and U.S.$5.22
per U.S.$100 face amount on 12 April 2010 to holders of New Par Notes.
Status
The New Notes are senior, unsubordinated, unconditional and unsecured
obligations of the Issuer.
Form and Denomination
The New Notes will be issued in bearer form in the denomination of
U.S.$100.
Negative Pledge
The New Notes will have the benefit of a negative pledge as described in
Condition 3(a) (Negative Pledge) of the respective Terms and Conditions.
Cross-Acceleration
The New Notes will have the benefit of a cross acceleration as described
in Condition 3(c) (Cross-Acceleration) of the respective Terms and
Conditions.
Principal Reinstatement
If the Relevant Event has not occurred by 31 December 2010, the Issuer
shall deliver additional New Discount Notes to the holders thereof on the
next interest payment date in an amount equal to half of the amount of
New Discount Notes held immediately prior 1 January 2011. For these
purposes ``Relevant Event'' means that a press release has been issued by
the International Monetary Fund (``IMF'') confirming that the IMF
Executive Board has approved the first review under the Successor
Programme (being the IMF programme with Seychelles which succeeds
the existing IMF Stand-By Arrangement with Seychelles).
Results ­ after Expiration
Shortly after the Expiration Date, the Issuer shall issue a press release
Date
describing the results of tenders received and the principal amount of the
New Notes to be issued.
Settlement Date
The Settlement Date for the Exchange Offer will be 11 February 2010
unless Seychelles, in its sole discretion, selects another date. The
Settlement Date will not be later than 1 March 2010.
On the Settlement Date, Seychelles will effect the exchange of New Notes
for all Existing Instruments validly tendered in accordance with the terms
and conditions of the Exchange Offer.
Scheduled Redemption
Unless previously redeemed, or purchased and cancelled:
(a)
each New Discount Note will be redeemed in 20 equal instalments
on a semi-annual basis commencing on 1 July 2016. The final
principal repayment date is 1 July 2026; and
(b)
each New Par Note will be redeemed in 7 equal instalments on a
semi-annual basis commencing on 1 July 2038. The final principal
repayment date is 1 July 2041.
Early Redemption
Seychelles may redeem all or, on a pro rata basis, part of the New Notes
on any principal repayment date.
Rating
It is intended that the New Notes will be rated by Fitch Rating, Ltd.
(``Fitch'') shortly after the Expiration Date.
Withholding Tax
All payments of principal and interest in respect of the New Notes and
coupons by or on behalf of Seychelles shall be paid gross, unless
withholding or deduction of any taxes, duties, assessments or
governmental charges is required by law. In that event, Seychelles shall
pay such additional amounts as will result in receipt by the noteholders
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and the couponholders after such withholding or deduction of such
amounts as would have been received by them had no such withholding
or deduction been required.
Tax Consequences
See ``Taxation'' for information on the potential tax consequences
affecting holders of New Notes.
Listing and Trading
Application has been made for the New Notes to be admitted to listing
on the Official List of the FSA and to trading on the Regulated Market
of the London Stock Exchange.
Clearing Systems
Euroclear Bank SA/NV and Clearstream Banking, socie´te´ anonyme.
Risk Factors
The principal risk factors that may affect the ability of Seychelles to fulfil
its obligations under the New Notes are discussed under ``Risk Factors''
and include:
*
Risks of not participating in the offer ­ Existing Instruments that are
not tendered may remain outstanding indefinitely and further
payments may not be made thereon.
*
Enforcement of Civil Liabilities and Waiver of Sovereign Immunity ­
A claimant will not be able to enforce a court judgment against any
assets of Seychelles in the Seychelles because under Seychelles law,
Seychelles may not waive immunity from attachment or seizure of
its assets.
*
Risks of participating in the offer ­ Seychelles may extend, amend or
terminate the Exchange Offer, on the basis described in the
Prospectus. Once there has been a tender of Existing Instruments,
tendering holders may not withdraw their tenders except in certain
limited circumstances.
*
Issuer is dependent on foreign resources.
*
Issuer is dependent on tourism ­ Any negative developments relating
thereto may affect Seychelles' ability to service payments.
*
Exchange rate risks ­ Exchange rate movements may negatively
affect the Seychelles' ability to service payments.
*
The New Notes may be redeemed prior to maturity.
*
Risks relating to the Guarantor and Guarantee ­ The Guarantor is a
supra-national organisation and immune from enforcement
actions. The Guarantor does not guarantee any payment of
principal or any other amounts relating to the Notes exceeding
U.S.$10,000,000. There is no tax gross-up for payments made
under the Deed of Guarantee.
Termination of Exchange
Seychelles may terminate the Exchange Offer if the total principal
Offer
amount of Existing Instruments tendered by the Expiration Date is less
than U.S.$304 million, equating to approximately 95 per cent. of the
principal amount of the Existing Instruments, by giving notice of any
such termination at any time prior to the fifth Business Day following the
Expiration Date, whereby all tenders will be legally null and void.
Jurisdictional Restrictions
The Prospectus does not constitute an offer of, or an invitation by or on
behalf of, Seychelles in any jurisdiction where an offer or invitation by or
on behalf of Seychelles is not permitted by the laws of such jurisdiction.
For a description of certain restrictions on offers, sales and deliveries of
New Notes and on distribution of the Prospectus and other offering
material relating to the New Notes, see ``Jurisdictional Restrictions''.
Governing Law of New Notes
English law.
and Deed of Guarantee
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