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Arnold & Porter Advises Barbados Creditors' Committee on Debt Restructuring

December 12, 2019

Arnold & Porter advised the Barbados Creditors' Committee with respect to the restructuring of more than $640 million of external public debt of The Government of Barbados, which closed on December 11, 2019. The deal involved an exchange of seven existing external obligations for bonds maturing in 2029, PDI Bonds maturing in February 2021, and cash.

The Barbados Creditors' Committee included major institutional investors, regional institutions, a central bank and individual holders. The external public debt included four outstanding English law bonds, two Barbados law bonds and a dual-tranche syndicated loan.

Barbados had defaulted on its external public debt on June 1, 2018. The Arnold & Porter team led by partner Whitney Debevoise and counsel Carlos Pelaez assisted the Barbados Creditors' Committee with committee formation and subsequent negotiations with the authorities leading to the December 11, 2019 closing. Newstate Partners acted as financial adviser to the Committee.

The Committee and the Government of Barbados reached a restructuring deal in principle in October 2019 and announced the terms of the exchange in November 2019. Following successful bondholder meetings and approval of an amendment to the syndicated loan facility, the deal closed.

The deal is notable for the inclusion of several investor protections, including a most-favored creditor clause, a principal reinstatement clause, a creditor engagement clause and the reimbursement of committee expenses. The deal is supported by an Extended Fund Facility with the International Monetary Fund (IMF) and contains a natural disaster clause.

This instruction follows Arnold & Porter's work earlier in 2019 representing the bondholders' committee of Trinidad Petroleum Holdings Limited in a successful exchange of old debt for $570,265,000 of senior secured notes due 2026 with improved terms for holders and in advising the Belize Bondholders' Committee in the 2017 negotiation of a restructuring of Belize's external debt with the issuance of $526.5 million of new bonds. The deal was precedent setting for sovereign debt restructuring and contained numerous innovations for a sovereign restructuring done without the IMF.

This announcement does not constitute an offer to sell or an invitation of an offer to purchase any security mentioned herein in the United States or any other jurisdiction.