St Kitts and Nevis pursues debt swap
BASSETERRE, St Kitts and Nevis, Thursday, March 01, 2012 – In a bid to further stabilize the St Kitts and Nevis economy, Prime Minister Dr Denzil Douglas has launched a two-pronged debt relief strategy.
Further to the economic and debt restructuring programme, which was commenced in late 2010, Prime Minister Douglas has announced that the state will now embark on a debt exchange programme, along with debt relief provided by a number of government's creditors, plus ongoing economic reforms, to help place the country's public finances on a more sustainable footing.
The debt exchange offer was officially launched on February 27 and holders of certain bonds and commercial bank loans owed by the Central Government, the Nevis Island Administration (NIA), and public enterprises are being invited to make claims in exchange for either New Discount Bonds or New Par Bonds, denominated in United States dollars or Eastern Caribbean dollars.
Dr Douglas, who is also the Minister of Finance, said the reforms were geared toward enabling St Kitts and Nevis indicated that that debt levels had risen beyond the country's capacity to pay, and it had become absolutely necessary to offer debt exchange to bring debt relief to the country.
Treasury Bills were excluded from this exchange offer and are not be affected.
The New Discount Bonds are to be issued with a 50% discount on the principal amount and will be based on a mortgage-style repayment structure with no grace period on the principal. These New Discount Bonds will benefit from a partial guarantee of up to US$12 million from the Caribbean Development Bank (CDB).
The New Par Bonds to be issued will have a final maturity of 45 years and will also be based on monthly mortgage-style payments.
Douglas, praised the CDB, the ECCB and the Monetary Council of Ministers of the ECCB, for supporting the programme.