Global law firm White & Case LLP has advised the Republic of Suriname on the successful restructuring of the country's two outstanding Eurobonds totalling US$675 million (US$912 million including accrued interest).
"While none of us expected in 2020 that it would take three years to complete the Eurobond restructuring process, Suriname has now achieved a balanced and sustainable outcome with the constructive support of its international bondholders," said White & Case partner Ian Clark, who co-led the Firm's deal team. "It is hoped that this rare sovereign restructuring success story, including the innovative use of oil-linked securities as part of the restructuring consideration, will pave the way for other countries facing financial challenges to find consensual resolutions for their own situations."
The Eurobond restructuring is one of the final steps in the comprehensive restructuring of the country's approximately US$2.4 billion of external debt, which also involves the restructuring of official bilateral claims and commercial debt claims. It marks the end of a three-year restructuring process and the completion of the first successful sovereign Eurobond restructuring since the Covid-19 pandemic. The completion of the restructuring reduces Suriname's debt service obligations by US$972 million over the period 2020-2026 and allows the government to focus on the continued implementation of key economic reforms and policies pursuant to the country's IMF programme.
The terms of the restructuring include the exchange of Suriname's two existing Eurobonds for a package of a new fixed income bond and a novel value recovery instrument (VRI), designed to compensate bondholders in certain circumstances for the reduction on principal and interest they agreed to provide in the restructuring. The VRI is issued in the form of oil-linked securities, representing a payment obligation of Suriname that is contingent on the generation of sufficient oil royalty revenues from Suriname's Block 58, and is the first instrument of its kind issued in a sovereign debt restructuring.
According to the terms of the VRI, Suriname, which is a carbon sink country, will pay VRI holders 30 percent of the oil royalty revenues generated from Block 58 until holders have been compensated for their claim reduction. Suriname will remain entitled to all other oil-related revenues derived from Block 58, as well as all revenues from other hydrocarbon resources in the country. This structure ensures that, if and when oil production materialises, Suriname is able to compensate bondholders for their debt relief efforts while safeguarding the potentially transformative effects of oil production for the domestic economy.
The White & Case team that advised on the transaction was led by partners Ian Clark (London) and Thomas MacWright (New York) and associate Dimitrios Lyratzakis (London), with support from partner Steven Otillar and associate Chantal Carriere (both Houston) and lawyers from a number of other White & Case offices.
Press contact
For more information please speak to your local media contact.
