ST. GEORGE’S, Grenada, May 12, 2020 (CMC) – The Grenada government said it will honour its debt obligations to international bondholders, due today, even as it awaits a response to a request for a moratorium.
“We will be making the payment, so we won’t default,” Prime Minister and Minister of Finance, Dr. Keith Mitchell, said in a text message, in response to a question, as to whether or not the island would be defaulting on the debt.
Mitchell had written to the Vice-President of The Bank of New York Mellon, Christopher Olsen, seeking an eight-month suspension on its obligation to the holders of its 2030 bonds, as it deals with the impact of the coronavirus (COVID-19) that has severely affected the local economy.
“As you are undoubtedly aware, our world is grappling with the unprecedented impact of the COVID-19 pandemic, with both devastating mortality and socio-economic impact,” Mitchell wrote in the May 4, letter.
The bond, in question, was issued in 2017, for an estimated EC$100 million, and matures in May 2030. It carries a seven percent interest.
The moratorium request with The New York Bank Mellon will accumulate US$15, 438,875. The principal is US$8,983,312, while the interest is US$6,455,563.
Government officials said that amortization payments have reduced the outstanding principal to EC$94.3 million.
Last week, Mitchell said that his administration is applying to the international community for a suspension on EC$60 million in debt payment, that is scheduled to be paid to creditors, covering the period of April to December 2020.
In an address to the nation, on Sunday night, Mitchell said that from projections for an eighth consecutive year of growth, the island is now facing the stark reality of negative growth, triggered largely by the significant impact on tourism, construction and education.