Grenada closes chapter on restructuring saga

jueves 12 de noviembre de 2015 15:34 GYT

By Paul Kilby

NEW YORK, Nov 12 (IFR) - Grenada was expected to issue new 15-year bonds on Thursday, effectively putting an end to a lengthy debt restructuring that restores the Caribbean island's relations with the market.

All holders of 2025s denominated in East Caribbean dollars and 93.8% of holders of US dollar 2025s agreed to swap their bonds for new 7% 2030s in a debt exchange launched earlier this month, said a source close to the transaction.

The government will issue about US$179m and EC$31.5m of 2030s to its bondholders, the source said.

Those levels satisfy collective action clauses that require at least a 75% participation rate to ensure the full transfer of the bonds.

By reducing public debt by 13 percentage points to 81% of 2017 GDP and providing substantial cash flow relief, the deal is expected to put Grenada back on a path of debt sustainability.

Another haircut in the principal amount could occur as soon as the third quarter of 2017, if the country successfully completes a sixth review of its program with the International Monetary Fund.

Meanwhile Grenada will pay holders of the new bonds a portion of the revenues received under the country's Citizen by Investment (CBI) program.

CBI Payment is subject to various conditions including the completion of the second haircut and to Grenada receiving more than US$15m in CBI revenues in any given year. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)