The Government of Barbados (the “Government”) announced today the launch of consent solicitations relating to certain Barbados law-governed U.S. dollar-denominated debt instruments issued by the Government and state-owned enterprises to amend the terms of these instruments.
The Government, the Barbados Agricultural Management Co. Ltd (“BAMC”) and the Barbados Investment and Development Corporation (“BIDC”) today have each issued consent solicitation statements respectively addressed to: (a) holders of the Government of Barbados Floating Rate U.S. Dollar Bonds 2009-2019 issued by the Government, (b) holders of the Barbados Agricultural Management Co. Ltd. Fixed Rate Dual Currency Non-Callable Sovereign Guaranteed Bonds issued by BAMC and (c) holders of the Barbados Investment & Development Corporation Fixed Rate Non-Callable Guaranteed Bonds 2007-2022 issued by BIDC, each as set out below (together, the “Consent Solicitation Statements”).
The Consent Solicitation Statements set out extraordinary resolutions to amend the terms and conditions of each relevant instrument which include (amongst other amendments):
- a reduction of the outstanding principal amount of each instrument by 25 per cent.;
- a reduction of accrued and unpaid interest by 35 per cent.;
NOT FOR DISTRIBUTION IN THE UNITED STATES
- the capitalisation of the remaining 65 per cent. of accrued but unpaid interest as of 1 October 2019;
- the interest on each existing instrument be set at a fixed rate of six and one-half per cent. (6.5%) per annum to be paid by each issuer semi-annually in arrear;
- the addition of a “natural disaster clause” that will enable the issuer to capitalise interest and defer principal maturities due on the new bonds for two years in the event that Barbados is adversely affected by an earthquake, tropical cyclone or rainfall event and a payment above the relevant threshold is made under its Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company insurance coverage; and
- a reduction of the denomination of each existing instrument to U.S.$1.
Holders who wish to participate in the consent solicitations may appoint the Government, BAMC or, as the case may be, BIDC or their agents as their proxy with respect to all such existing instruments tendered thereby to attend the relevant bondholder meeting to be held on 26 February 2020 (or any adjourned meetings) and vote in favour of a relevant extraordinary resolution by returning a duly executed form of consent to the Ministry of Finance, Economic Affairs and Investment prior to 5:00 p.m. (Barbados time) on 25 February 2020.
Subject to the extraordinary resolution having been duly passed in respect of the relevant series of bonds and the conditions set out therein being met, such extraordinary resolution will become effective on the closing date which is expected to be 26 February 2020.
Holders should be aware that the bank, broker, dealer, trust company or other nominee through which they hold their existing claims may have earlier deadlines for taking action pursuant to the consent solicitations.
Any questions relating to the consent solicitation, the voting process or how to obtain copies of the relevant Consent Solicitation Statements should be addressed to:
Mrs Octavia Forde
Deputy Permanent Secretary – Ministry of Finance, Economic Affairs and Investment, Government of Barbados Telephone: +1 (246) 535-5376
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