IMF Working Papers

Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned

By Tamon Asonuma, Xin Li, Michael G. Papaioannou, Saji Thomas, Eriko Togo

July 24, 2017

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Tamon Asonuma, Xin Li, Michael G. Papaioannou, Saji Thomas, and Eriko Togo. Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned, (USA: International Monetary Fund, 2017) accessed November 3, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper documents the two debt restructurings that Grenada undertook in 2004–06 and 2013–15.Both restructurings emerged as a consequence of weak fiscal and debt situations, whichbecame unsustainable soon after external shocks hit the island economy. The two restructurings provided liquidity relief, with the second one involving a principal haircut. However, the first restructuring was not able to secure long-term debt sustainability. Grenada’s restructuring experience shows the importance of (1) establishing appropriate debt restructuring objectives; (2) committing to policy reforms and maintaining ownership of the restructuring goals; and (3) engaging closely and having clear communications with creditors.

Subject: Asset and liability management, Bonds, Debt restructuring, Debt service, Debt sustainability, External debt, Financial institutions, Public debt, Sovereign debt restructuring

Keywords: Bond contract, Bond exchange, Bond restructuring, Bonds, Caribbean, CBI program, Debt ratio, Debt restructuring, Debt sustainability, Development partner, Disaster Clause, Exchange offer, Foreign currency, Global, Grace period, Grenada, Interest rate, Long-term debt, Private sector, Serial Debt Restructurings, Serial Defaults, Sovereign Debt, Sovereign debt restructuring, Sovereign Debt Restructurings, Sovereign Defaults, US$ bond, US$-denominated bond, WP

Publication Details

  • Pages:

    58

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/171

  • Stock No:

    WPIEA2017171

  • ISBN:

    9781484311035

  • ISSN:

    1018-5941