## Barbados’ 2018–19 Sovereign Debt Restructuring–A Sea Change?

_IMF Working Papers, February 21, 2020_

## Source details

**Canonical URL:** [Barbados’ 2018–19 Sovereign Debt Restructuring–A Sea Change?](https://www.imf.org/en/publications/wp/issues/2020/02/21/barbados-201819-sovereign-debt-restructuringa-sea-change-49044)

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## Bibliographic details
- Authors: Myrvin Anthony, Gregorio Impavido, Bert van Selm
- Published: February 21, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513529967.001

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### Summary
- Examines the causes, processes, and outcomes of Barbados’ 2018–19 sovereign debt restructuring—its first ever.
- Characterizes the restructuring as comprehensive and featuring several rarely used approaches:
  - Restructuring of treasury bills.
  - Use of a retrofitted collective action mechanism.
- Concludes the restructuring has helped to set Barbados’ public debt on a clear downward trajectory.
- Notes that a sustained reform effort will be needed to gradually reduce public debt from about 160 percent of GDP before the restructuring to the country’s 60 percent debt-to-GDP target.
- Publication type: IMF Working Papers.

### Key Findings and Outcomes
- The 2018–19 operation was Barbados’ first sovereign debt restructuring.
- The restructuring included nonstandard elements for sovereign restructurings:
  - Treasury bills were restructured.
  - A retrofitted collective action mechanism was used.
- The restructuring placed public debt on a downward trajectory, contingent on continued fiscal and structural measures.
- Debt reduction target specified: from about 160 percent of GDP (pre-restructuring) to 60 percent of GDP (target).

### Policy Implications and Recommendations
- Sustained reform effort required, including:
  - Maintaining high primary surpluses.
  - Implementing ambitious structural reforms.
- These measures are necessary to realize the gradual reduction in public debt toward the 60 percent debt-to-GDP target.

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2020/02/21/barbados-201819-sovereign-debt-restructuringa-sea-change-49044_