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Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned

Michael Papaioannou, Saji Thomas, Tamon Asonuma () and Xin Li

No 2017/171, IMF Working Papers from International Monetary Fund

Abstract: This paper documents the two debt restructurings that Grenada undertook in 2004–06 and 2013–15.Both restructurings emerged as a consequence of weak fiscal and debt situations, whichbecame unsustainable soon after external shocks hit the island economy. The two restructurings provided liquidity relief, with the second one involving a principal haircut. However, the first restructuring was not able to secure long-term debt sustainability. Grenada’s restructuring experience shows the importance of (1) establishing appropriate debt restructuring objectives; (2) committing to policy reforms and maintaining ownership of the restructuring goals; and (3) engaging closely and having clear communications with creditors.

Keywords: WP; debt sustainability; foreign currency; interest rate; Sovereign Debt; Sovereign Defaults; Sovereign Debt Restructurings; Serial Debt Restructurings; Serial Defaults; Grenada; Disaster Clause; exchange offer; debt ratio; private sector; long-term debt; grace period; US$-denominated bond; bond exchange; bond restructuring; US$ bond; development partner; bond contract; CBI program; Debt restructuring; Bonds; Sovereign debt restructuring; Caribbean; Global (search for similar items in EconPapers)
Pages: 58
Date: 2017-07-24
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