CDB to provide $12 million to guarantee newly-restructured bonds, PM Douglas says

St. Kitts and Nevis’ Prime Minister and Minister of Finance, Rt. Hon. Dr. Denzil Douglas at Wednesday’s Press Conference (Photo by Erasmus Williams)

BASSETERRE, ST.KITTS, JANUARY 26TH 2012 (CUOPM) – St. Kitts and Nevis’ Prime Minister and Minister of Finance, the Rt. Hon. Dr. Denzil L. Douglas has disclosed that the twin-islands Federation’s debt restructuring exercises should be completed by the end of this quarter.

Speaking at his monthly press conference on Wednesday, Dr. Douglas also said that the Caribbean Development Bank will provide a $12 million guarantee in support of the newly restructured bonds, thereby advancing the interests of the Federation in the form of a more sustainable debt package.

The Ministry of Finance had announced in December last year that the Federal Government of St. Kitts and Nevis was in advanced discussions with the Barbados-based financial institution on a partial guarantee to be attached to the new instruments that will be issued by the Government to participating creditors as part of the comprehensive debt restructuring exercise that is currently underway.

“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,” said the Ministry of Finance.

In that statement the Ministry said the partial guarantee initiative is the result of intense discussions in recent months between the Government and the CDB on the question of how the CDB, as the leading development institution in the region, can best support and contribute to St. Kitts and Nevis’s efforts to return its crushing debt burden to a sustainable footing.

The Ministry said the partial guarantee, if approved by the bank’s Board of Directors, will improve recovery values for bondholders in a way that does not compromise the country’s capacity to pay going forward.

“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.