Above: Charlestown, Nevis (CJ Photo)

The government of St Kitts and Nevis is in advanced discussions with the Caribbean Development Bank on a comprehensive debt restructuring exercise.

The two sides are discussing a partial guarantee from the CDB that would be attached to new instruments issued by the government to participating creditors.

“The partial guarantee would protect a portion of the cash flows that will be due to holders under the new instruments that will replace existing bonds upon the conclusion of the forthcoming exchange offer,” the Ministry of Finance announced yesterday.

The partial guarantee initiative comes from intense talks between the two parties on how the CDB can help the country return its “crushing” debt burden to solid ground.

If approved, the guarantee would improve recovery values for bankholders, according to the Ministry.

The partial guarantee is expected to be considered by the CDB’s Board of Directors this month.

The government also announced that it had been advised to delay interest payments until the conclusion of ongoing negotiations with debt advisors on the restructuring plan.