Bloomberg News

Jamaica Debt Exchange to Remain Open for Bondholders

March 01, 2013

Jamaica will keep open its local debt exchange to attract more bondholders, a Finance Ministry official said.

About 99 percent of bondholders agreed to exchange J$860 billion ($9 billion) of higher-interest Jamaican dollar debt for lower-yielding bonds, said Pamella McLaren, head of debt management at the Finance Ministry.

“I think it’s very good under the circumstances,” McLaren said in a phone interview from Kingston today. “We’re letting it remain open for possibility of bondholders who may want to participate.”

Jamaica’s government will “for the foreseeable future continue to accept late tenders,” the ministry said in an e- mailed statement today.

In a national address on Feb. 11, Prime Minister Portia Simpson Miller said the drop in interest payments will enable the government to cut its debt from 140 percent of gross domestic product to 95 percent over the next seven years.

The Caribbean nation reached a preliminary agreement with the International Monetary Fund for a $750 million loan that depends “critically on a high rate of participation of private creditors” in the debt swap, the Washington-based lender said on Sept. 15. The IMF’s board will consider approving the loan by the end of March.

Jamaica last restructured debt in 2010, when it swapped $7.8 billion of local bonds for securities with longer maturities and lower interest rates as the country’s debt burden exceeded 120 percent of GDP. The accord paved the way for Moody’s Investors Service to raise Jamaica’s credit rating and the IMF to approve a 27-month, $1.27 billion standby credit.

To contact the reporter on this story: Eric Sabo in Washington at esabo1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net


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