Creditors of Grenada with $262 million of defaulted bonds have agreed to a debt restructuring that will leave them half of the original face value.
The eastern Caribbean island with a population of 110,000 will give the bondholders $131 million in international and local-currency securities due in 2030 with an interest rate of 7 percent, according to a government statement. A committee of institutional investors from the U.S., U.K. and Caribbean agreed to the terms, Natasha Marquez-Sylvester, the head of debt management, said by phone. The accord has yet to be made final, she said.
The swap would mark the second restructuring in the past decade for Grenada, an $836 million economy that has struggled to recover from hurricane damage in 2004 and 2005 and a global recession that took a toll on tourism. The country’s debt, in proportion to gross domestic product, stood at 117 percent in 2014, second only to Jamaica in the Caribbean, according to International Monetary Fund estimates.
Grenada’s defaulted 2025 bonds are trading at about 32 cents on the dollar, according to data compiled by Bloomberg.
In 2013, Grenada defaulted on $193.5 million in international bonds and several local bonds, a portion of which was held by international investors, including Franklin Advisers Inc., Grantham Mayo Van Otterloo & Co. and T. Rowe Price Associates.