Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned

59 Pages Posted: 5 Sep 2017  

Tamon Asonuma

International Monetary Fund Research Department

Mike Li

International Monetary Fund (IMF)

Michael G. Papaioannou

International Monetary Fund (IMF)

Saji Thomas

International Monetary Fund (IMF)

Eriko Togo

World Bank

Date Written: July 2017

Abstract

This paper documents the two debt restructurings that Grenada undertook in 2004-06 and 2013-15.Both restructurings emerged as a consequence of weak fiscal and debt situations, whichbecame unsustainable soon after external shocks hit the island economy. The two restructurings provided liquidity relief, with the second one involving a principal haircut. However, the first restructuring was not able to secure long-term debt sustainability. Grenada's restructuring experience shows the importance of (1) establishing appropriate debt restructuring objectives; (2) committing to policy reforms and maintaining ownership of the restructuring goals; and (3) engaging closely and having clear communications with creditors.

Keywords: Grenada, Western Hemisphere, International financial markets, Sovereign Debt; Sovereign Defaults; Sovereign Debt Restructurings; Serial Debt Restructurings; Serial Defaults; Grenada; Disaster Clause, Sovereign Debt, Sovereign Defaults, Sovereign Debt Restructurings, Serial Debt Restructurings, Serial Defaults, Disaster Clause, International Lending and Debt Problems

JEL Classification: F34, G15, H63

Suggested Citation

Asonuma, Tamon and Li, Mike and Papaioannou, Michael G. and Thomas, Saji and Togo, Eriko, Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned (July 2017). IMF Working Paper No. 17/171. Available at SSRN: https://ssrn.com/abstract=3030762

Tamon Asonuma (Contact Author)

International Monetary Fund Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Mike Li

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Michael G. Papaioannou

International Monetary Fund (IMF) ( email )

700 19th Street NW
10-115
Washington, DC 20431
United States
001-202-623-7799 (Phone)
001-202-623-7018 (Fax)

Saji Thomas

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Eriko Togo

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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