Seychelles restructures all 9 1/8%, amortizing notes in exchange offer

By Angela McDaniels

Tacoma, Wash., Feb. 11 - The Republic of Seychelles received tenders for 89% of the debt eligible for its exchange offer, according to a government news release.

The republic began an exchange offer on Dec. 14 for its 9 1/8% notes due 2011, amortizing notes due 2011 and some loans with Seychelles as obligor.

The collective action clause contained in one of the original instruments eligible under the exchange offer was implemented. As a result, holders who did not tender their claims also received new notes in exchange for their original instruments, and all of the debt eligible for the offer has been restructured.

The offer ended Jan. 14, and settlement occurred Feb. 11.

Holders were offered new 2% notes due 2041 and new discount notes due 2026. According to the release, discount notes were issued in exchange for all of the debt.

The new discount notes were issued at a 50% discount to the principal amount of debt exchanged and have a face value of $168.9 million. They will amortize in 20 equal semiannual installments beginning in July 2016 and ending in January 2026.

The interest rate on the discount notes will be 3% for the first two years, 5% for the next three years, 7% for years six, seven and eight and 8% from year nine through maturity. Interest will accrue from Jan. 1.

The new discount notes benefit from a partial guarantee on interest from the African Development Bank of up to $10 million.

Holders of the new notes will receive a one-off goodwill payment on April 12 equal to $10.44 per $100 principal amount of notes.

"Together with the debt relief recently granted by the Paris Club and other external creditors, it [the debt exchange] has transformed our economic outlook by making our debt position and public finances sustainable," said Danny Faure, Seychelles's minister of finance, in the news release,

Citibank NA was the exchange agent, and D.F. King & Co., Inc. (+44 20 7920-9700) was the information agent. White Oak Advisory LLP (+44 20 7969-2731) acted as the financial adviser to the government for the exchange offer.

© 2015 Prospect News.
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