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Suriname Reaches Agreement with Bondholders for Debt Restructuring

Suriname agrees to $650 million bond and value recovery instrument linked to future oil revenues

Suriname Reaches Agreement with Bondholders for Debt Restructuring

The government of Suriname has announced that it has reached an agreement in principle with its Eurobond creditor committee for the restructuring of its debt. As part of the deal, Suriname will issue a single, $650 million 10-year bond with a 7.95% interest rate, which includes a 25% “haircut on the total recognized claims.” Of the 7.95% interest rate, 4.95% will be paid off in 2024 and 2025, with the remainder added to the principal.

A value recovery instrument linked to future oil revenues, which has an end date of Dec. 31, 2050, is also part of the deal. Suriname has committed to allocating a certain portion of royalty income from Block 58 to compensate bondholders for losses incurred as a result of debt restructuring. The first $100 million in royalties from that block will go to the government, after which 30% of annual royalties will be allocated for payments to compensate debt holders.

Members of the creditor committee, which holds about 75% of outstanding bonds, include Franklin Templeton Investment Management Limited, Eaton Vance Management, Grantham, Mayo, Van Otterloo & Co LLC, and Greylock Capital Management LLC.

The deal is subject to reaching a staff-level agreement with the International Monetary Fund by June 15. The IMF has been working closely with Suriname authorities to bring their financing program back, while also seeking progress in bilateral debt talks between the government and China. No fresh details on the bilateral talks with China were included in the government statement.

Source: https://www.reuters.com/markets/suriname-bondholders-reach-debt-restructuring-deal-sources-2023-05-03/

Date: 3 mei 2023

Categories:  Economische Crisis, Staatsschuld 

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