Suriname seeks noteholder consents to amend notes due 2023 and 2026

By Cady Vishniac

Detroit, Nov. 16 – The Republic of Suriname is seeking consents to amend its $125 million of 9 7/8% notes due Dec. 30, 2023 (Cusip: 86886PAB8, P68788AB7) and its $550 million of 9¼% notes due Oct. 26, 2026 (Cusip: 86886PAA0, P68788AA9), according to a press release.

The consent solicitations expire at 5 p.m. ET on Nov. 24

Committee and actions

A group of institutional investors holding about 25% of the outstanding principal amount of both the 2023 notes and 2026 notes have formed an official holders’ committee with Newstate Partners LLP acting as financial advisor.

The republic is requesting short-term relief from certain of its other foreign currency commercial and official creditors.

In addition, the republic is engaged in discussions with the IMF to secure a funded program aimed at stabilizing its fiscal framework.

Proposed amendments

The sole amendment to the 2026 notes would be the deferral to March 31, 2021 of interest payments originally due Oct. 26. Should the republic reach an agreement with the IMF on a funding arrangement before March 24, 2021, the interest payment would then be deferred to April 26, 2021.

The following amendments are proposed for the 2023 notes:

• The deferral to March 31, 2021 of interest payments originally due Dec. 30, provided that if the republic reaches an agreement with the IMF on a funding arrangement before March 24, 2021, the payments will then be deferred to April 26, 2021;

• The deferral to March 31, 2021 of principal payments originally due Dec. 30, provided that if the republic reaches an agreement with the IMF on a funding arrangement prior to March 24, 2021, the amortization schedule will be adjusted so that the principal of the notes will be repaid in six semiannual installments beginning June 30, 2021 with the amortization amount that would have been paid on March 31, 2021 spread equally across the six remaining payment dates;

• Amend the covenant requiring the republic to take all action and issue all authorizations, as stockholder or otherwise, necessary to cause Staatsolie to declare and pay any dividends and to pay such dividends in U.S. dollars directly into a collection account so that the republic will only be required to comply with the obligations of the covenant from and after the earlier of the seventh day after the republic’s and trustee’s receipt of written notice and March 31, 2021, or, if an agreement on a funding arrangement is reached with the IMF prior to March 24, 2021, from and after June 30, 2021; and

• Amend the covenant requiring the republic to deposit all royalties received pursuant to a mineral agreement and all payments for power pursuant to the power purchase agreements into the collection account so that the republic will be only required to comply with the obligations of the covenant from and after the earlier of the seventh calendar day after the republic’s and trustee’s receipt of such written notice and March 31, 2021, or, if an agreement on a funding arrangement is reached with the IMF prior to March 24, 2021, from and after June 30, 2021.

Neither of the notes will accrue any interest on the deferred payments between the originally scheduled payment dates and April 24.

Waiver

A waiver has also been requested for events of default under that may occur through the termination date if a termination trigger has occurred, through March 31, 2021 if a termination trigger has not occurred or through June 30, 2021 if a funding arrangement has been reached with the IMF prior to March 24, 2021.

Holders delivering consents will be consenting to both the proposed amendments to their notes and the waiver.

Details

Only holders of record as of 5 p.m. ET on Nov. 12 will be entitled to vote.

The company will pay holders a consent fee equal to $0.50 for each $1,000 principal amount of notes for which consents are delivered and accepted.

The proposed amendments will become effective only if consents from holders of at least 75% of the outstanding principal amount of 2023 and 2026 notes have been delivered and accepted. The waiver will become effective only if consents from 50% of noteholders are delivered and accepted. In addition, the amendments to each series of notes will only become effective if the amendments proposed to the other series also become effective.

Finally, should holders of a majority of the notes’ aggregate principal provide written notice between Jan. 31, 2021 and March 24, 2021 that they believe the republic has not been negotiating in good faith the terms of the debt restructuring, the deferral of interest payments on the notes and the first amortization payment under the 2023 notes will terminate on the seventh day after the republic’s and trustee’s receipt of the written notice, regardless of the discussions with the IMF, and the obligation of the republic to cause payments to be made under the covenants of the 2023 notes mentioned in the proposed amendments will apply from the earlier of the seventh day after the republic’s and trustee’s receipt of the notice and March 31, 2021, also regardless of the discussions with the IMF.

White & Case LLP and Lazard Freres are acting as the republic’s legal and financial advisors, respectively.

Morrow Sodali Ltd. (+44 208 089 3287, 203 609-4910, +852 2158 8405; suriname@investor.morrowsodali.com; https://bonds.morrowsodali.com/surinameconsent) is the information and tabulation agent for the consent solicitation.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.