Suriname offers to exchange two notes, solicits for full exchange

Chicago, Oct. 23 – The Republic of Suriname started an exchange offer relating to two notes and is conducting a consent solicitation that would force an exchange of any remaining notes, according to a press release.

For the consent solicitation to be successful, 75% of the notes from each series must be tendered for exchange.

The offer and solicitation relate to the republic’s $125 million of issued and outstanding 9 7/8% notes due 2023 (Cusips: 86886PAB8, P68788AB7) and its $550 million of issued and outstanding 9¼% notes due 2026 (Cusips: . 86886PAA0, P68788AA9).

Considerations

Tendering noteholders will receive an amount of new notes and an amount of a value recovery instrument in the form of an oil-linked security.

The republic will issue an aggregate principal amount of $650 million of new bonds, with an additional $10 million issued as expense reimbursement bonds that will be liquidated to cover a portion of the $5,925,000 of fees and expenses of the bondholder committee.

The new bonds will have a 7.95% interest rate, with the first semiannual payment on Jan. 15, 2024.

The interest before Jan. 15, 2026 will be a combination of cash and paid-in-kind interest. The initial cash component will be 4.95%. After Jan. 15, 2026, interest will be cash only.

Additionally, a portion of the cash payment due Jan. 15, 2024 in the amount of $395,000 will be deducted and paid to the bondholder committee’s legal counsel, Orrick, Herrington & Sutcliffe LLP, reducing pro rata cash payments due to noteholders.

Amortization starts Jan. 15, 2027 with 1/14 principal payments.

The notes may be redeemed at par, including capitalized interest, at any time during calendar year 2025.

The oil-linked securities will be issued in an aggregate notional amount of $314,675,761.46.

The oil-linked security represents a payment obligation of the republic which is contingent on the generation of royalty revenues from Block 58 offshore Suriname.

The security consideration assumes an effective date of Nov. 10, but will be increased if the effective date is later by $0.43 per day.

Specific considerations

Each $1,000 note due 2023 will be exchanged into $1024.82 of new bonds and $496.13 of oil-linked securities.

Each $1,000 note due 2026 will be exchanged into $948.90 of new bonds and $459.38 in oil-linked securities.

Accrued interest to the effective date will also be paid.

Solicitation

For each series, if 75% of noteholders consent by participating in the exchange offer, any bonds remaining in each series will be subject to the same exchange offer whether they participated or not.

Details

The invitation expires at 5 p.m. ET on Nov. 3.

The effective date is expected to be Nov. 10, when the republic and the relevant trustee will execute the supplemental indentures and the new indentures.

Settlement is planned for Nov. 27.

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

Morrow Sodali Ltd. is the information, tabulation and exchange agent (+44 20 4513 6933, 203 609-4910, suriname@investor.morrowsodali.com, https://projects.morrowsodali.com/Suriname).

Noted in the press release, the republic and bondholders reached an agreement-in-principle on the restructuring terms of the eligible bonds on May 3.

The terms of the agreement-in-principle are incorporated in, and to be implemented, pursuant to the invitation.

Only bondholders who are qualified institutional buyers under Rule 144A or non-U.S. persons under Regulation S may participate in the restructuring.

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