Above: Prime Minister Dr Denzil Douglas (Photo: Erasmus Williams)
By the Caribbean Journal staff
St Kitts and Nevis Prime Minister Dr Denzil Douglas is calling the acceptance of an exchange offer to restructure the country’s external debt “a historic day for St Kitts and Nevis.”
Douglas said the results of the exchange offer would “provide extensive and permanent levels of debt relief to our country.”
The remaining balances will be repaid over an extended period at “concessional rates of interest,” according to the Prime Minister, who thanked the country’s creditors for their cooperation.
“We view these results as a vindication of the tough decisions that we have had to take at home against a very difficult global economic backdrop,” he said. “They give us the strength to pass on with this process of transformation.”
On March 14, holders of 96.8 percent of the aggregate amount of bonds and commercial loans eligible to participate in the exchange offer agreed to provide debt relief to the country by exchanging their claims on the government and the public sector for New Bonds.
Under the terms of the offer, holders of claims could either exchange their instruments for New Discount Bonds denominated in US dollars, or New Par Bonds denominated in EC dollars.
The New Discount Bonds, which will be partially guaranteed by the Caribbean Development Bank, entail a 50 percent reduction at face value, with the balance to be repaid over 20 years, with coupons set at 6 percent for the first four years, stepping down to 3 percent.
The New Par Bonds will have a final maturity of 45 years, including a 15-year grace period on principal, with interest fixed at 1.5 percent.
White Oak Advisory LLP is the government’s financial advisor in the transaction, with Clifford Chance LLP acting as legal advisor.