Basseterre - Dec. 5, 2011 -  The Federal Government of St. Kitts and Nevis is in advanced discussions with the Barbados-based Caribbean Development Bank (CDB) on a partial guarantee from the CDB to be attached to the new instruments that will be issued by the Government to participating creditors as part of the comprehensive debt restructuring exercise that is currently underway.

“The partial guarantee would protect a portion of the cash flows that will be due to holders under the new instruments that will replace existing bonds upon the conclusion of the forthcoming exchange offer,” the Ministry of Finance announced on Thursday.

In a statement the Ministry said the partial guarantee initiative is the result of intense discussions in recent months between the Government and the CDB on the question of how the CDB, as the leading development institution in the region, can best support and contribute to St. Kitts and Nevis’s efforts to return its crushing debt burden to a sustainable footing.

The Ministry said the partial guarantee, if approved by the bank’s Board of Directors, will improve recovery values for bondholders in a way that does not compromise the country’s capacity to pay going forward. 

“The advanced discussions currently taking place are focusing on technical aspects of the partial guarantee, as well as on its size,” said the Ministry, disclosing that the partial guarantee initiative is expected to be considered by the CDB’s Board of Directors in December.

“The partial guarantee is part of a broader support package that the CDB is working on in support of St. Kitts and Nevis’s restructuring and reform efforts.

The Ministry said further information will be posted on http://sknmof.com/creditors.htm as soon as it becomes available.