Suriname has reached a debt restructuring agreement with its Eurobond creditor committee, according to a statement released by the government on Wednesday. The agreement includes a single, $650 million 10-year bond with a 7.95% interest rate and a 25% “haircut” on the total recognized claims.
This development comes as Suriname has been struggling with mounting debt, a declining economy, and a depreciating currency. The country’s debt-to-GDP ratio has increased from 52% in 2014 to over 120% in 2021, according to the International Monetary Fund (IMF).
The debt restructuring agreement is expected to provide some relief to Suriname’s economy, as it will lower the country’s debt burden and allow the government to free up funds for investment in key sectors such as healthcare, education, and infrastructure.
Under the terms of the agreement, Suriname will issue a new $650 million bond that will be due in 2031, with an interest rate of 7.95%. This bond will replace Suriname’s existing two outstanding dollar-denominated bonds. The 25% “haircut” on the total recognized claims means that creditors will receive 75 cents on the dollar for their outstanding debt.
The agreement is subject to certain conditions, including the implementation of fiscal and structural reforms to put Suriname’s economy on a sustainable path. The government has committed to implementing these reforms, which include measures to improve revenue collection, control spending, and boost economic growth.
The debt restructuring agreement is a significant milestone for Suriname, which has been grappling with a severe economic crisis in recent years. The country has been hit hard by the COVID-19 pandemic, which has led to a sharp decline in revenues from the mining sector, one of Suriname’s key sources of income.
In addition to the pandemic, Suriname has also been struggling with a range of other challenges, including high levels of corruption, a lack of foreign investment, and weak institutions. These challenges have made it difficult for the country to address its debt problems and put its economy on a sustainable path.
However, the debt restructuring agreement is expected to provide a much-needed boost to Suriname’s economy, as it will help to reduce the country’s debt burden and provide some breathing room for the government to implement much-needed reforms. The government will now need to focus on implementing these reforms in a timely and effective manner to ensure that the country can achieve sustainable economic growth and development over the long term.
In conclusion, Suriname’s debt restructuring agreement with its Eurobond creditor committee is a significant development that will provide some relief to the country’s struggling economy. While there are still many challenges ahead, the agreement is a positive step forward and underscores the government’s commitment to implementing much-needed reforms to put Suriname’s economy on a sustainable path.
