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Ministerie van Financiën en Planning

Restructuring of bondholders finalized

Paramaribo, December 6 th, 2023

  • The Republic of Suriname announces the completion of the restructuring of its
    outstanding international bonds.
  • This operation alleviates debt service by USD 972 million over 2020-2026 and allows
    the Government to dedicate significant higher spending on society during trying times.
  • This transaction – that puts an end to complicated negotiations with bondholders – is
    the first successful sovereign debt restructuring achieved with bondholders since the

The Republic has completed today the settlement of the restructuring of its two outstanding
international bonds (the “Eurobonds”).
The Republic obtained on November 3rd, the instructions and consents required to exchange and/or
modify 100% of the aggregate principal amount outstanding of each series of its 2023 and 2026
Bonds pursuant to the terms of its Invitation.
The two Eurobonds, capitalized at high rates of 9.25% (for the Bonds due 2026) and 12.875% (for
the Bonds due 2023) and amounting to USD 912 million, were exchanged for (1) a fixed income
instrument in the form of a new bond and (2) a “value-recovery instrument” (“VRI”) in the form
of an oil-linked security.
The new bond is issued with a face value of USD 660 million, a 10-year maturity, and a coupon of
7.95%. During the first two years, only 4.95% will be paid in cash with the remaining 3%

The new bond represents a 29% principal haircut on original face value and accumulated past due
The issuance of the new bond is complemented with the issuance of an oil-linked security as a
“value recovery instrument”, which is a contingent payment obligation of the Republic and only
pays out if the Republic generates oil royalty revenues from Block 58.
After an initial USD 100 million of oil royalty revenues is allocated to the government, holders of
the VRI will receive 30% of the yearly oil royalties from Block 58 until bondholders are
compensated for the haircut they consented to. The VRI is structured to ensure that the Republic
and its population will fully benefit from the other three sources of oil-related revenues of Block
58 beyond oil royalties (i.e. income taxes, a share in profit oil and dividends from Staatsolie), while
receiving 70% of the oil royalty revenues until haircut is compensated and 100% afterwards. The
VRI is limited to Block 58 and revenues of other oil blocks are unaffected. The VRI can be bought
back early and/or redeemed at anytime if so desirable.
The debt restructuring provides significant fiscal space to navigate through the structural reforms
and sustainably support economic recovery. Over the period 2020-2026, debt servicing, which
amounted to USD 1,073 million under the previous bonds, will be reduced to USD 101 million.
The new coupon on the restructured instrument is 7.95% against 9.250% (2026 bond) and 12.875%
(2023 bond).
“In 2016 and 2019, at a time of record low interest rate internationally, Suriname took out bonds
that carried some of the highest interest rates in the world in both absolute terms (9.25% and
12.875%) and premium over the US Bonds (7.45% and 11.175%). Today, despite high interest rate
environment, the new coupon has been reduced in absolute terms (7.95%) and only pays a premium
of 3.08 % over US Bonds” explained Minister of Finance Stanley Raghoebarsing.
The first coupon payment will be made on January 15, 2024 at a 4.95% interest (0.08% over US
Treasuries). No principal payment is due before January 15, 2027.
President Santokhi’s government inherited in 2020 an unsustainable public debt burden, reaching
148% of GDP, from 41% in 2015. The Government embarked on an ambitious reform agenda,
requested an IMF- supported program and committed to reducing public debt. Thanks to difficult
fiscal efforts and debt reduction, the public debt ratio is on track to be around 100% at the end of
this year and reach 2018 levels by 2028.
The restructuring offer presents the following characteristics:

  1. It significantly alleviates debt service in the short/medium term,
  2. … contributes to bringing public debt back to sustainable levels on an accelerated pace
  3. … helps avoid further unacceptable fiscal sacrifices,
  4. while recognizing that bondholders could be “compensated” for the nominal losses incurred
    as part of the restructuring if the Republic of Suriname receives sufficient royalty revenues
    from Block 58.

The authorities are confident that the combination of Suriname’s efforts to implementing a broad
range of economic reforms, strong commitment to fiscal consolidation, comprehensive treatment
of the debt issue and sufficient debt relief will all contribute to ensure a more prosperous future for
Lazard and White & Case LLP were respectively acting as the Republic’s financial and legal
advisors and together with the Suriname Debt Management Office and the Ministry of Finance &
Planning have worked on this result.