St Kitts gov't unveils debt-exchange offer

The St Kitts & Nevis government Monday announced a debt-exchange offer of certain bonds and commercial bank loans in return for new United States and Eastern Caribbean dollar-denominated bonds.

"The terms of our exchange offer have therefore been designed to resolve the country's debt overhang and place our public finances on a sustainable footing, along with the debt relief being provided by other creditors and the important contribution from our economic reforms," said Prime Minister Denzil Douglas.

Douglas, who is also the finance minister, said he was pleased that "our consultations with creditors have been constructive and helped us to better understand their views on how best to deal with our debt burden.

"Although we have been operating under very tight constraints, in finalising the terms of the exchange offer we have endeavoured to incorporate creditors' preferences to the extent possible."

The government said that under the terms of the exchange offer, which is being supported by the Barbados-based Caribbean Develop-ment Bank through the provision of a partial guarantee, bondholders "are being invited to tender their claims in exchange for either new discount bonds or new par bonds.

"The financial terms of the exchange offer are based on the economic data and forecasts produced by the International Monetary Fund (IMF) as part of the first review under the country's three-year standby arrangement, originally approved in July 2011, and take into account the feedback received from affected creditors during a nine-month period of intensive consultations," the Ministry of Finance said in a statement.

It said the new discount bonds will be issued with a 50 per cent discount on the principal amount of bonds to be tendered.

"These bonds will be based on a monthly mortgage-style repayment structure with no grace period on principal," the ministry said, adding that the new discount bonds have a final maturity of 20 years, with the last payment due in March 2032.

- CMC