Grenada to Hold Virtual Meeting for 2030 International Bondholders
The Government of Grenada announced that it will hold a virtual meeting for its 2030 international bondholders on Friday. This decision comes after the country was severely affected by Hurricane Beryl on July 1, which caused catastrophic damage and an estimated US$30 million in damages.
Background
Grenada became the first country in the world to use a "hurricane clause" in a government bond, which allows authorities to postpone debt payments after a major natural disaster. In response to the hurricane, the Dickon Mitchell government last month said it would defer more than US$$17 million in total payments to government bondholders.
Upcoming Meeting
The Ministry of Finance stated that the impact of the hurricane, the activation of the Hurricane Clause, and the general outlook of the economy will be the topics of discussion on Friday. All interested investors must register to attend the event by Wednesday and can do so by visiting the Ministry’s website. The registration form is available on the website, which also explains that Grenada’s seven percent bonds due 2030 with the code ISIN: USP48863AE77 will experience a deferral payment because of the hurricane.
Financial Details
According to a statement posted on the Ministry of Finance website, the portion of a Deferred Payment Amount comprised of interest will be converted into principal on and with effect from the relevant Deferral Date. Where such interest is converted into principal, the principal amount of the Debt Securities shall be increased in the amount of such deferred interest.
The statement also said that the modeled loss to Grenada from the Event is more significant than US$15 million. Additionally, White Oak Advisory and Cleary Gottlieb Steen & Hamilton LLP acted as the financial and legal advisors, respectively, to the Grenada government in relation to the 2030 bonds.
Hurricane Beryl
Hurricane Beryl, a Category 4 storm, landed on July 1, 2024, and caused catastrophic damage to Grenada. The damage and casualties from the hurricane were widely reported in the news, and on July 16, 2024, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) made a US$44 million policy payment to Grenada.
Conclusion
The upcoming virtual meeting for Grenada’s 2030 international bondholders is a significant step in addressing the financial implications of Hurricane Beryl. The country’s decision to use a hurricane clause in its government bonds demonstrates its commitment to responding to natural disasters and minimizing the impact on its finances.
FAQs
Q: What is the purpose of the virtual meeting?
A: The virtual meeting will discuss the impact of Hurricane Beryl, the activation of the Hurricane Clause, and the general outlook of the economy.
Q: Who must register to attend the event?
A: All interested investors must register to attend the event by Wednesday.
Q: What is the duration of the deferral payment?
A: The deferral payment will last for two consecutive payment dates, falling on November 12, 2024, and May 12, 2025.
Q: Who acted as financial and legal advisors to the Grenada government?
A: White Oak Advisory and Cleary Gottlieb Steen & Hamilton LLP acted as the financial and legal advisors, respectively.