Barbados: Assessment of indicative restructuring terms

The government published indicative restructuring scenarios for its external debt (ie US$ commercial debt) on 20 November. In this report, we assess the proposal and provide estimated recovery values.

We retain our Hold on the bonds. At a 12% exit yield, we estimate PVs of the new bonds at 42.5 and 47.7 per unit of existing principal for restructuring scenarios 1 and 2, respectively. This compares with current prices of the BARBAD bonds of 57.1 for the 21s and 55.6 for the 22s, on an indicative mid-price basis on Bloomberg (as of cob 21 November). 

We think secondary market prices can just about be rationalised with an exit yield of 10% (especially regarding the 22s), and bondholders might be able to improve terms slightly, providing this is consistent with the IMF programme, but clearly there are downside risks too.

Most Viewed See latest

This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a res...

Full Tellimer disclaimers