Friday, April 12, 2024

Creditors’ concern


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Some “major” foreign creditors have joined forces in an effort to make sure they are not disadvantaged as Government fixes Barbados’ debt problems.

On Friday, Newstate Partners LLP, an independent advisory firm based in London, announced that it was advising several external investors with Barbados holdings, and who had formed a creditor committee to protect their interests.

The group is seeking more information on Barbados’ debt restructuring effort, and complained that “the decisions taken thus far by Barbados have been unilateral in nature, and did not involve prior consultation with or input from members of the committee, the external commercial creditor community at large, or other key stakeholders”.

Newstate Partners LLP’s managing partner Spencer Jones told the Saturday Sun that the creditors included “a number of major international institutional investors with substantial holdings”.

“The committee has organised to engage with Barbados but has not yet had any communication with the Government,” he added, while declining to quantify the investments.

Newstate Partners LLP said the creditors it was representing were “a representative group of institutional holders of Eurodollar bonds and other external commercial debt facilities issued by the Government of Barbados”.

They joined forces “in response to the announcement by Barbados that it has suspended the payment of interest and principal on all external commercial debt, while continuing to pay interest on all domestic debt”.

Their intention was to “engage with Barbados with regard to its present situation, to facilitate communication among creditors, and to pursue any appropriate actions”.

“The committee believes that any future interactions with Barbados should be conducted in a manner consistent with the G-20-endorsed Principles for Stable Capital Flows and Fair Debt Restructuring, which include transparency and timely flow of information, open dialogue, good faith actions, and fair treatment among creditor classes,” said officials of Newstate Partners LLP.

The firm urged holders of Barbados external commercial debt who were interested in receiving more information to make contact.

Government recently announced that it had appointed White Oak Advisory Ltd, based in London, to act as its financial advisor in the debt restructuring process. The Mia Mottley administration also said it had retained the services of New York-based Cleary Gottlieb Steen & Hamilton LLP as external legal advisor.

In an investor update published earlier this week by the Barbados Government Information Service, Government said White Oak “is in the process of establishing initial contacts with affected creditors, and is expected to soon commence creditor engagement on the basis of the medium-term macroeconomic projections to be finalised by the Government in the coming weeks”.

It also reiterated that “all queries relating to the announced debt restructuring should be directed to the financial advisor. (SC)


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