| NEW YORK
NEW YORK May 3 Bondholders of Grenadian
sovereign debt announced on Friday they formed a committee to
address the Caribbean nation's decision to restructure its
public debt that resulted in the government's missing a coupon
payment in March.
Financial advisor BroadSpan Capital issued a press release
stating that "holders of more than 75 percent" of the U.S.
dollar-denominated and East Caribbean dollar-denominated bonds
formed a steering committee and a broader ad-hoc bondholders'
committee to raise their concerns with the government.
The Grenada government, in March, said it did not have the
resources to make coupon payment on the U.S. dollar-denominated
bond that matures in 2025, Thomson Reuters IFR reported on March
11. The payment was due on March 15 and no payment was made
within the 30 day grace period, "and the bonds are now in
default," BroadSpan said in Friday's statement.
Standard & Poor's, on March 12, lowered its sovereign credit
rating for Grenada to SD, or Selective Default, from CCC-minus,
citing the government's decision.
At the time, S&P said Grenada did not expect to have the
funds the pay the coupon during the grace period.
"The Committee took note of the GOG's (Government of
Grenada) stated commitment to a comprehensive and collaborative
process, and believes that any request for support from
commercial creditors should be matched not only by support from
multilateral and bilateral lenders, but also by sound policy
measures on the part of the GOG," BroadSpan's Mike Gerrard said
in the statement.
IFR, citing a prior government statement, reported that last
year Grenada was forced to use the grace period to buy some time
to make another payment. At the time it borrowed $4.4 million
from a local source on a short-term basis, IFR said.
Coupons on the 2025 jumped from 2.5 percent to 4.5 percent
in September 2011 and will step up again to 6 percent in
September this year. The coupon will increase in 2015 and 2017,
and hit a peak of 9 percent in 2018, IFR reported.
The committee's statement said it has asked the government
to confirm its willingness to directly pay for reasonable fees
and expenses incurred during the negotiations, including fees
related to financial and legal advisors as well as out-of-pocket
Grenada's 2025 U.S. dollar-denominated bond is currently
showing bid/ask price spread of 34.00/36.00 with a yield of
24.328 percent, according to Thomson Reuters data.