LatinNews Daily - 05 May 2023

In brief: Suriname announces debt restructuring deal

* Suriname’s government led by President Chandrikapersad Santokhi has announced that it has reached a deal in principle with members of its Eurobond creditor committee regarding the restructuring of US$675m of Suriname sovereign bonds. The five members of the committee currently own or control approximately 75% of the outstanding bonds. According to the government, the new bond will be issued with (i) a 25% reduction of contractual claims, (ii) an interest rate of 7.95%, reflecting a significant reduction from interest rates under the existing bonds due 2023 and 2026 respectively, and (iii) only 4.95% interest to be paid in cash in 2024 and 2025. It also includes a value recovery instrument (VRI) linked to future oil revenues whereby Suriname will allocate a certain portion of royalty income from Block 58 in the future to compensate bondholders for losses incurred during the restructuring. The VRI will only pay out in the event such royalty revenues in fact materialise. A further condition of the deal is that Suriname and the International Monetary Fund (IMF) reach a staff level agreement (SLA) by 15 June. In December 2021 President Santokhi had concluded negotiations on a US$688m extended fund facility (EFF) agreement with the IMF but this stalled last year.

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