IMF Reaches $300 Million Staff-Level Agreement With Barbados

(Bloomberg) The government of Barbados has reached a deal of about $300 million with the International Monetary Fund as it seeks to restructure one of the world’s highest debt loads. The island nation would receive an initial tranche of about $50 million as soon as October after the IMF board approves the deal, Prime Minister Mia Mottley said Friday in a joint press conference in Bridgetown with the IMF’s Bert van Selm. Mottley took office in June and promptly announced plans to restructure the roughly $600 million in outstanding dollar bonds.

In the last decade, the economy of Barbados has been caught in a cycle of low growth, widening fiscal deficits and increasing debt Mottley said Friday in a joint press conference in Bridgetown with the IMF’s Bert van Selm. International reserves have fallen to about $240 million dollars, which is below reserve adequacy levels, while government debt has become unsustainable. The yield on nation’s dollar bonds maturing in 2035 have fallen to 13.49 percent from 15.95 percent on June 4, after the government announced its intentions to restructure.