Antigua government to restructure debt

The Antigua & Barbuda government says it is moving to restructure the country’s debt portfolio and will launch a bond valued at about US$250 million to US$300 million, under terms that are meant to ameliorate the country’s cost of debt servicing.

“We’re now seeking to float a bond to address the issue of the debt service ratio. Our goal is to secure cheaper funding and to settle some of the arrears, particularly with domestic creditors,” said Prime Minister Gaston Browne.

Browne said his administration is exploring options with Oppenheimer, and possibly the Development Bank of Latin America and the Caribbean, known as CAF. He was optimistic about raising the necessary funds within three months.

Antigua is also holding discussions with international creditors to address various decades-old debt matters, including a Brazilian loan now estimated at US$44 million, which is around nine times the original loan size.

“There was less than US$5 million borrowed back in the 1980s for a deep bay development project, and it has now escalated to over US$44 million,” he said,

Browne said he has since reached out to Brazilian President Luiz Inácio Lula da Silva, requesting a potential write-off of the interest and penalties associated with the loan.

Antigua is also addressing its obligations related to Venezuela, which it owes US$500 million under the PetroCaribe oil facility. Under the talks with Caracas, Antigua hopes to halve the debt to US$250 million, and address other debts owed to Venezuelan.

Browne said the aim of the debt restructuring efforts is to lower the country’s current debt service ratio from approximately 30 per cent to about 20 per cent, thereby creating more financial flexibility for future government initiatives.

Antigua currently spends $300 million on debt servicing annually, while government revenue is about $900 million, the government said.

CMC