Grenada Steering Committee and Ad-Hoc Committee Announce Formation

NEW YORK, May 3, 2013 – Holders of more than 75% of the U.S. Dollar Bonds Due 2025 and E.C. Dollar Bonds due 2025 (together, the “Bonds”) issued by the Government of Grenada (“GOG”) announced that they have formed a Steering Committee (the “Committee”) and a broader Ad-Hoc bondholders’ committee in order to address matters concerning the GOG’s announcement on March 8, 2013 that circumstances have forced the country to undertake a comprehensive and collaborative restructuring of its public debt, including the Bonds. In that regard, on March 15, 2013 the GOG did not make its scheduled interest payment on either of the Bonds; the 30 day grace period has since lapsed and the Bonds are now in default.

Notwithstanding the default, the Committee notes the GOG’s recognition that any government debt restructuring process must be a component of a broader growth plan for Grenada’s economy, carried out in partnership with the GOG and the private sector.

According to Mike Gerrard of BroadSpan Capital, the Committee’s financial advisor, “The Committee took note of the GOG’s stated commitment to a comprehensive and collaborative process, and believes that any request for support from commercial creditors should be matched not only by support from multilateral and bilateral lenders, but also by sound policy measures on the part of the GOG.”

The Committee has communicated its views to the GOG regarding the essential elements of a constructive dialogue between the Committee and the GOG. These views are consistent with the International Monetary Fund’s policy and the Group of 20-endorsed Principles for Stable Capital Flows and Fair Debt Restructuring, namely transparency, open dialogue, good faith negotiations, fair treatment and non-discrimination among domestic, foreign, multilateral and bilateral creditors. In particular, the Committee’s views are as follows:

1. Transparency: All information required for creditors to undertake a complete analysis of the liquidity and fiscal situation of the GOG should be fully disclosed in a transparent, proactive, timely and accurate manner.
2. Open Dialogue: The GOG should maintain open and continuous communication with the different groups of creditors, including the Committee, be responsive to their requests and recommendations, and recognize the Committee as representative of the bondholders.
3. Good Faith Process: All proposals related to the Bonds should be based on good faith discussions rather than unilateral decisions.
4. Fair Treatment: All classes of Grenada debt, including obligations due to domestic, foreign, multilateral and bilateral creditors, should be included in the process and each class should be treated with reasonable equity and fairness among the holders. Any proposal to holders of the Bonds should be accompanied by parallel proposals regarding a comprehensive approach to each class of public sector debt and government guarantees.
5. Genuine Budgetary and Fiscal Policy Framework: Restructuring proposals should be accompanied by parallel proposals regarding GOG sponsored growth measures and fiscal adjustment over the short and medium term to strengthen Grenada’s financial position. 
6. Realistic Repayment Capacity: Negotiations related to the Bonds should be conducted in the context of a debt sustainability analysis (“DSA”) prepared by the GOG and shared with the Committee. The DSA should incorporate reasonable suggestions and recommendations of the Committee and other classes of creditors, including the IMF. 
7. Committee Expenses: The Committee requests that the GOG confirm its willingness to directly pay for reasonable fees and expenses incurred by the Committee during the negotiations including fees related to financial and legal advisors and other out-of-pocket expenses. The Committee considers the arrangements for payment of such fees and expenses to be a signal of the GOG’s intention to proceed in good faith and in accordance with accepted international standards and practices. 

The Committee has engaged BroadSpan Capital LLC as its financial advisor and requests that inquiries be directed to Noah Kessler at BroadSpan at +1(305) 424-3400 or This email address is being protected from spambots. You need JavaScript enabled to view it..