Bondholders urged to participate in debt exchange programme

Eligible bondhold­ers who refuse to participate in government’s debt exchange pro­gramme will not benefit from the new arrangement outlined by government in case there is default in payment, the Ministry of Finance has reinstated.

The government is seeking an International Monetary Fund Programme that requires a debt restructuring before a deal could be reached with the Bretton Woods institution.

Bondholders have until Jan­uary 17, 2023 to accept the new arrangement, which include some suspension of interest payments.

“For those not participating in the domestic debt exchange, they will continue to hold the non-ten­dered eligible bonds – the “old” bonds. However, the government reserves the right to ensure that “old” bonds do not benefit from

 their non-participation in the domestic debt exchange, includ­ing through additional regulatory measures”, the Ministry, in a Fre­quently Asked Questions (FAQs) statement, said.

The statement assured that once the domestic debt exchange was successfully completed, and progress was made on securing international financial support, the government would benefit from macroeconomic stability, larger fiscal space, and new affordable debt service obligations.

It added that associated risks and discount factors were expect­ed to then go back to reasonable levels, close to one-digit territory.

“As such, the new bonds are expected to ensure the maximum recovery possible for the domestic financial sector under our very constrained fiscal and debt situa­tion,” it said.

Eligible Holders seeking to participate are advised to ensure Offer or Exchange Instructions are submitted and received by the CSD before the expiration date.

Participants (the Deposito­ry Participants) are required to forward to the CSD the collated file containing the information on each Offer or Exchange Instruc­tion received from each holder of Eligible Bonds that expresses interest to participate in the Invita­tion to Exchange on or before the deadline.

The government announced a further extension of the Domestic Debt Exchange expiration date to January 16, 2023.

According to a press release from the Finance Ministry on Saturday, December 24, it has amended the terms of the Debt Exchange.

“The government announced its decision to extend the Expira­tion Date of the Invitation from Friday, December 30, 2022, at 4 pm (GMT) to Monday, January 16, 2023, at 4 pm.

“The Settlement Date for the Invitation is now expected to oc­cur on Tuesday, January 24, 2023, or as soon as practicable thereafter, but no later than the Long stop Date which is now scheduled for Tuesday, January 31, 2023, unless further extended by government pursuant to the Invitation.”


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