SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Dollar bonds of Bahamas bond fell over 7-10% on Thursday despite its recent oversubscribed bond issuance. Last week, Bahamas issued two tranches of offshore bonds of $385mn, including a $250mn 7Y bond at a yield of 13.5%. It also issued a $200mn bond partially backed by the supranational entity, Inter-American Development Bank (IADB). Analysts cite an article by Global Capital that questioned the bonds’ complicated structure, and also expressed worry over the nation’s ability to increase revenue alongside its “overly optimistic” projections, akin to the IMF’s understanding of the sovereign. The article noted that the partial guarantee by the multilateral lender shows its stressed funding Bahamas’ government is reluctant to raise taxes and sees it as a last option for fiscal adjustments. Columbia Threadneedle Investments Kate Moreton said, ““I think there is a willingness to pay in The Bahamas, but they are struggling fiscally… as an importer of basically everything, they are dealing with severe inflation”.

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