Grenada Government Closes Debt Exchange Offer

ST. GEORGE’S, Grenada (CMC) – The Grenada government Tuesday announced that it has formally closed its debt exchange offer exchanging its United States (US) and Eastern Caribbean (EC) dollar bonds due in 2025.

A brief government statement said “tenders representing 94 per cent of the country’s US dollar bonds due 2025 and 100 per cent of EC dollar bonds due 2025 outstanding and eligible to vote in the exchange were received by the expiration date of the offer”.

It said that consistent with the collective action clause in the original bonds, however, the entirety of those bonds has been exchanged for new Grenada US dollar and EC dollar bonds due 2030.

“The 2030 Bonds issued by Grenada as part of the exchange have 29 equal repayments of principal, with the first payment due on May 12, 2016,” the government statement noted.

Last month, the Keith Mitchell government announced it had launched the offer after “intensive and detailed negotiations with the Steering Committee of Grenada Bondholder” and that it would “ implement the ‘in principle’ agreement reached earlier this year to reduce the original principal amount of the 2025 Bonds by 50 per cent in two stages”.

It said the first half of the principal reduction would be implemented upon the closing of the proposed transaction, with the remaining half upon timely completion by Grenada of its current Extended Credit Facility (ECF) with the International Monetary Fund (IMF).

In 2014, Grenada entered into a three-year US$21.9 million ECF to support an “ambitious programme” to correct the island’s fiscal imbalances and lift sustainable growth.

Grenada will receive debt relief worth 19% of its GDP through the restructuring, a much-needed reprieve considering that the country’s total public sector debt reached 111 per cent of gross domestic product (GDP) in 2014, according to IMF estimates.