St. Kitts and Nevis closes exchange offer and concludes additional debt restructuring agreements

BASSETERRE, ST. KITTS, APRIL 19TH 2012 (CUOPM) – The Federal Government of St. Kitts and Nevis announced Thursday that it has closed its exchange offer launched pursuant to an Exchange Offer Memorandum dated 27 February 2012, as amended by a press release dated 7 March 2012 (the “Exchange Offer Memorandum”).

The statement said that for the purposes of the Exchange Offer Memorandum, the Settlement Date is 18 April 2012.

“As part of the settlement process, on 18 April 2012, the Government issued New Discount Bonds with a face value of US$43.3 million and New Par Bonds with a face value of EC$134.4 million. The New Discount Bonds, which carry a partial guarantee from the Caribbean Development Bank of up to US$12 million, were issued at a discount of 50% to the face value of the original eligible debts tendered for the discount option,” the statement said.

It noted that on 18 May 2012 holders of the New Discount Bonds will receive a one-off ‘goodwill payment’ equal to US$130 per US$1000 face value of New Discount Bonds held, along with the first regular monthly payment of principal and interest.

Holders of the New Par Bonds will at the same time receive a one-off ‘goodwill payment’of EC$11.25 per EC$1000 face value of New Par Bonds held, along with the first regular monthly payment of interest.

On 15 March 2012, St. Kitts and Nevis announced that tenders for 96.8% of the aggregate principal amount of debts eligible under the exchange offer had been received.

During 16-17 April 2012, the collective action clauses contained in four of the original instruments eligible under the exchange offer were implemented. As a result, holders who did not tender their claims were yesterday issued New Discount Bonds in exchange for their original instruments. With the implementation of the collective action clauses, the percentage of eligible claims restructured rises to 100.

Separately, the Federal Government and the Nevis Island Administration also announced Thursday that two restructuring agreements covering approximately EC$900 million in loans and other debt facilities owed to domestic creditors have been executed.

These historic agreements will allow domestic creditors to monetize encumbered lands located both in St. Kitts and in Nevis through participation in Special Purpose Vehicles (SPVs) which have been established according to international best practices. The SPVs will be professionally managed and allow domestic creditors to realize the full value of their assets in a swift and orderly fashion.

The debt restructuring agreements referred to above have been implemented within the context of the three-year Stand-By Arrangement with the International Monetary Fund, approved in July 2011.

In commenting on the outcome of the restructuring, the Rt. Hon. Dr. Denzil L Douglas, Prime Minister and Minister of Finance, said: “The agreements reached yesterday will reduce the public debt by more than one third and will transform the outlook for our country, and for generations of Kittitians and Nevisians to come.”

Dr. Douglas added: “The support that we have received from our creditors has allowed us to place our debt and public finances on a sustainable footing.”

Prime Minister Douglas again expressed sincere gratitude and appreciation to creditors for their full support.

White Oak Advisory acted as financial advisor to the Government in these transactions. Clifford Chance LLP acted as legal advisor.

Background information on the debt restructuring process is available on http://sknmof.com/creditors.htm or http://www.sknmof.com/documents/2012/02/skn-exchange-offer.pdf. The Debt Unit may be contacted at +1 869 467 1087.

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