Suriname seeks to defer payments on $675m debt

LONDON (Reuters) – Suriname’s government has asked creditors for a payment deferral on its two bonds, totaling $675 million, in what analysts say could be the prelude to a broader restructuring of the debt.

The South American nation’s government announced on Saturday the launch of a consent solicitation for its two bonds, due in 2023 and 2026, in a statement. The consent solicitation expires on November 23.

The move was expected after Suriname said late last month it wanted to use a 30-day grace period on its dollar coupon payments due Oct. 26 to talk to creditors about its sustainability issues. debt.

“Assuming Suriname obtains approval of the applications specified in the Consent Solicitation, there will be a deferral of certain interest and principal payments that would normally be due in 2020,” the government said in the statement.

The suspension of debt service will give the government breathing space to work towards an agreement with the International Monetary Fund on a financing programme, start debt relief talks with some foreign exchange creditors and help preserve foreign exchange. to manage the fallout from the COVID-19 crisis, It said.

“The status quo buys the authorities time to secure an IMF program, but is likely a prelude to a more comprehensive restructuring,” Stuart Culverhouse, head of sovereign and bond research at Tellimer, wrote in a note.

Suriname’s government is the latest to struggle with debt in the wake of the pandemic, with Zambia becoming Africa’s first sovereign default in the pandemic era.

In preparation for a showdown with the government over debt, Surinamese dollar bondholders said earlier this month they had formed a creditors’ committee and welcomed the talks. with the government on its debt situation.

Reporting by Tom Arnold; Editing by Paul Simao

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