Barbados Offered Haircut, Par Options in Debt Restructuring
- The Barbados government said it presented holders of foreign debt with two scenarios last month and plans to launch a formal exchange offer after another round of negotiations with creditors.
- The first scenario included 14-year amortizing notes issued at 66.67% of face value. Two-year grace period with 3.5% coupon, followed by 7.5% coupon in years 3-14, semiannual payments and natural disaster clause.
- The second scenario included bond issued at par to face value maturing in 25 years, maturing in 25 years, the 15-year grace period on the principal and a natural disaster clause.
- Both scenarios “are at the limits of what is compatible with the debt sustainability framework that underpins” loan agreement with IMF. The government plans to discuss scenarios with creditors in coming weeks “with a view to adjusting the structure of the bonds to meet creditor preferences so long as they are compatible with the debt” targets agreed to with IMF.