St Kitts seeks CDB assistance on debt restructuring
St Kitts and Nevis said it is seeking assistance from the Caribbean Development Bank to help deal with its crushing debt burden.
BASSETERRE, St Kitts, Friday December 2, 2011 - St. Kitts and Nevis said it is in advanced discussions with the Barbados-based Caribbean Development Bank (CDB) on a partial guarantee for new instruments to be issued to creditors as part of an ongoing comprehensive debt restructuring exercise.
The Ministry of Finance explained that it is looking at how the CDB can best support and contribute to the country’s efforts to return its crushing debt to a sustainable footing.
The International Monetary Fund (IMF) said earlier this year that St. Kitts and Nevis has the world's second highest gross national debt at US$1 billion.
Debt restructuring was a key condition of a three-year, US$84 million Stand-By Arrangement for the federation that the IMF agreed to in August.
The finance ministry said if the partial guarantee is approved by CDB Board of Directors at their meeting this month, it will improve recovery values for bondholders in a way that does not compromise the country’s capacity to pay going forward.
“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 stated.
“The partial guarantee is part of a broader support package that the CDB is working on in support of St. Kitts and Nevis’s restructuring and reform efforts.”