By Guillermo Parra-Bernal
Feb. 18 (Bloomberg) -- Mexico agreed to refinance $400 million in
defaulted Cuban debt as the countries take steps to increase trade.
The accord, reached yesterday in Havana by diplomats, comes after six
years of decreasing financial ties between the countries, the Mexican
Trade and Export Bank said yesterday in a release. State-owned Banco
Nacional de Cuba and the island nation's central bank will be
responsible for the debt, according to the statement. Terms weren't
disclosed.
The money being refinanced will be used to fund Mexican exports to the
Communist-ruled island. According to data from the Mexican bank, known
as Bancomext, trade between the nations fell to about $200 million last
year from an average $435 million a year during the 1990s.
Under acting President Raul Castro, Cuba's government has been
renegotiating terms of its defaulted debt to attract new investment and
blunt the effect of a 46-year U.S.-led economic embargo. Since Raul
Castro replaced his ailing brother Fidel in July 2006, Cuba has
restructured $166 million in defaulted loans with Russia and stretched
out payments with Venezuela for billions of dollars in annual oil purchases.
Fidel Castro, who had ruled Cuba since ousting U.S.-backed President
Fulgencio Batista in 1959, suspended payments on about $11 billion of
debt during the late 1980s as financial aid from the Soviet Union began
to phase out.
In May 2006, Bancomext recovered $35 million of defaulted Cuban debt
after an Italian court ordered payments should be made to Mexico from a
Cuban escrow account in Italy. Banco Nacional de Cuba had stopped debt
payments to Mexico on behalf of Empresa de Telecomunicaciones de Cuba in
2002.
To contact the reporter on this story: Guillermo Parra-Bernal in Caracas
at gparra@bloomberg.net
Last Updated: February 18, 2008 15:03 EST
http://www.bloomberg.com/apps/news?pid=20601086&sid=arJ0Lf2y.EDk&refer=latin_america
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