Jun 2018 Financial News

(BN) Barbados Bondholders Said to Form Group for Restructuring Talks

Jun 08, 2018

Barbados Bondholders Said to Form Group for Restructuring Talks
2018-06-08 18:50:18.889 GMT

By Ezra Fieser
(Bloomberg) -- Creditors holding Barbados global bonds formed a committee this week to negotiate with the government as it seeks to restructure one of the world’s highest debt loads, according to two people with direct knowledge of bondholder discussions.

The committee, which is in the process of hiring an adviser, includes large institutional investors, according to the people, who asked not to be identified as the creditor discussions are private. The group has not disclosed what percentage of outstanding bonds it holds, but the people said its approval would be necessary for a restructuring to be finalized.

Prime Minister Mia Mottley, who took office last week and promptly announced plans to restructure, has not said how much debt holders will be offered. The government -- which missed a coupon payment on global bonds this week and was cut to selective default by S&P Global Ratings -- is likely to propose paying as little as 25 percent of the current value of the dollar bonds, according to the people.

Holders of the roughly $600 million of dollar bonds prefer negotiations that would keep the government out of default, allowing them to continue to access capital markets. An offer of 25 cents on the dollar would lead to drawn-out negotiations, they said.

The government did not respond to calls and emails seeking, comment. The yield on bonds maturing in 2035 rose to above 16 percent this week from around 9.4 percent before the
announcement, according to data compiled by Bloomberg. 

To contact the reporter on this story:
Ezra Fieser in Santo Domingo, Dominican Republic at
efieser@bloomberg.net
To contact the editor responsible for this story:
Matthew Bristow at mbristow5@bloomberg.net