Debt Swap May Herald Aid Boon
An agreement under which Britain’s fourth-biggest commercial bank is donating all of its Sudanese debt to a U.N. relief agency could herald a wave of swaps to reduce the debt of the world’s poorest countries, analysts and aid officials say.
Under the agreement by Midland Bank PLC, the Sudanese government will exchange the debt, with a face value of $800,000, for local currency for investment.
The money will finance a United Nations Children’s Fund (UNICEF) development program in Sudan’s drought-stricken central Kordofan area.
Through its contribution to one of the world’s poorest countries, Midland made a public gesture of good will while at the same time divesting itself of nearly worthless paper for which it had already set aside provisions from its profits.
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