Government of Barbados’s $640 Million Restructuring


Arnold & Porter advised the Barbados Creditors’ Committee with respect to the restructuring of more than $640 million of external public debt of The Government of Barbados, which closed on December 11, 2019.

The deal involved an exchange of seven existing external obligations for bonds maturing in 2029, PDI Bonds maturing in February 2021, and cash.

The Barbados Creditors’ Committee included major institutional investors, regional institutions, a central bank and individual holders. The external public debt included four outstanding English law bonds, two Barbados law bonds and a dual-tranche syndicated loan.

Barbados had defaulted on its external public debt on June 1, 2018.

The Committee and the Government of Barbados reached a restructuring deal in principle in October 2019 and announced the terms of the exchange in November 2019. Following successful bondholder meetings and approval of an amendment to the syndicated loan facility, the deal closed.

The deal is notable for the inclusion of several investor protections, including a most-favored creditor clause, a principal reinstatement clause, a creditor engagement clause and the reimbursement of committee expenses. The deal is supported by an Extended Fund Facility with the International Monetary Fund (IMF) and contains a natural disaster clause.

The Arnold & Porter team led by partner Whitney Debevoise (Picture) and counsel Carlos Pelaez assisted the Barbados Creditors’ Committee with committee formation and subsequent negotiations with the authorities leading to the December 11, 2019 closing. Newstate Partners acted as financial adviser to the Committee.

Involved fees earner: Whitney Debevoise II – Arnold & Porter Kaye Scholer LLP; Carlos Pelaez – Arnold & Porter Kaye Scholer LLP;

Law Firms: Arnold & Porter Kaye Scholer LLP;

Clients: Government of Barbados – Creditor Committee;

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Author: Ambrogio Visconti