Circular Letter – Restructuring of Hotel Loans

CIRCULAR LETTER No. 09-1

CIRCULAR LETTER
TO BANKS

Pursuant to Article 83 of the Law of May 14, 2012, on banks and other financial institutions, banks must comply with the provisions of this circular letter regarding:
a. the restructuring of loans granted to the hotel sector; b. the establishment of specific provisions related thereto; and
c. the non-establishment of mandatory reserves on resources used in the context of these loans.

1. General Provisions

Due to:
i. the stagnation of the general economic situation and the prospects of low growth for the fiscal year 2015-2016;
ii. the low occupancy rate of hotels in the country;
iii. the negative impact of economic difficulties on the financial situation of hotels;
iv. the importance of the hotel sector for the revival of tourism and the economy in general; and
v. the exposure of the banking system to the hotel sector;

Banks are hereby authorized:

1. to proceed, by mutual agreement with their client, to the redefinition of the terms of any loan granted to a viable hotel institution (both in terms of interest rate and capital amortization). Restructured loans will be subject to a specific provision of 5% and will be treated and reported separately according to the provisions prescribed in Section 8 of Circular 87.

2. not to establish mandatory reserves on both gourdes and dollars resources used to grant loans to a hotel institution.

2. Reports

Banks must submit to the BRH (Bank of the Republic of Haiti) at the end of each quarter, namely March 31, June 30, September 30, and December 31, a detailed report on the list of loans to the hotel sector and on the list of loans covered by the program.

The reporting templates attached to this circular letter must be annexed to the compliance reports related to Circular 83-4 on the concentration of credit risks.

3. Entry into Force

This circular letter replaces that of March 27, 2015 (# 09) and enters into force as of June 15, 2016.

Port-au-Prince, June 7, 2016

Jean Baden Dubois
Governor

Annexes:
Annex 1. Loans to the hotel sector
Annex 2. Loans covered by the hotel sector program

ANNEX 1
No. Clients Amount Disbursed Date of Loan Approval Interest Rate Loan Term Credit Outstanding Banking Institution

Loans to the hotel sector as of ....... 201...

1. Loans to the hotel sector before March 2015
2. Loans to the hotel sector after March 2015
3. Total loans to the hotel sector

Signature of two authorized executives: ______________ _________________ Position/Title: _______________ _________________

ANNEX 2.
No. Clients Amount Disbursed Date of Loan Approval Interest Rate Loan Term Loan Outstanding Banking Institution

Loans covered by the program (hotel sector) as of ....... 201...
Total loans covered by the program

Signature of two authorized executives: ______________ _________________ Position/Title: _______________ _________________