Suriname extends consent solicitation deadline for 2023, 2026 notes

By Marisa Wong

Los Angeles, March 31 – The Republic of Suriname announced it extended the expiration date of each of its consent solicitations 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).

The consent solicitations now expire at 5 p.m. ET on April 8, according to a press release. The consent solicitations were previously set to expire at 5 p.m. ET on March 29.

The republic said the extension will give it more time to “reach staff-level agreement with the IMF on a funded program and conduct orderly negotiations with its external creditors to define a sustainable and comprehensive treatment of [its] external debt.”

Proposed amendments

As previously announced, the amendment to the 2026 notes would be the deferral to May 10 of interest payments originally due Oct. 26. Should the republic reach an agreement with the IMF on a funding arrangement before April 30, the interest payment would then be deferred to July 30.

The following amendments are proposed for the 2023 notes:

• The deferral to May 10 of interest payments originally due Dec. 30, provided that if the republic reaches an agreement with the IMF on a funding arrangement before April 30, the payments will then be deferred to July 30;

• The deferral to May 10 of principal payments originally due Dec. 30, provided that if the republic reaches an agreement with the IMF on a funding arrangement prior to April 30, the principal payment will be made on July 30;

• The deferral to July 30 of the principal payment due on June 30, provided that an agreement has been reached with the IMF by April 30;

• 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 those 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 May 10 or, if an agreement on a funding arrangement is reached with the IMF prior to April 20, from and after July 30; 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 May 10 or, if an agreement on a funding arrangement is reached with the IMF prior to April 30, from and after July 30.

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 any existing or future events of default through the termination date if a termination trigger has occurred, through May 10 if a termination trigger has not occurred or through July 30 if a funding arrangement has been reached with the IMF prior to April 30.

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 March 16 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 June 15 and July 23 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 July 10, also regardless of the discussions with the IMF.

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

Morrow Sodali Ltd. (+44 20 8089 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.

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