•  
  •  
 

ORCID

Tamon Asonuma 0000-0002-2258-3249

Michael G. Papaioannou 0000-0003-2420-8319

Saji Thomas 0000-0003-2831-0839

Eriko Togo 0000-0001-6688-7650

Keywords

Sovereign Debt; Sovereign Defaults; Sovereign Debt Restructurings; Serial Debt Restructurings; Serial Defaults; Grenada; Disaster Clause

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, which became 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.

Acknowledgments

This is an extended version of IMF Working Paper “Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned” (Asonuma et al. 2017c, WP 17/171). The views expressed in this paper are those of the authors and should not be attributed to the International Monetary Fund, its Executive Boards or its management. The authors would like to thank Trevor Alleyne, Julianne Ams, Tom Best, Xavier Debrun, Mark Joseph Flanagan, Daniel Hardy, Klaus P. Hellwig, Nicole L. Laframboise, Natasha Marquez-Sylvester, and Rafael Molina for helpful comments and suggestions. We would also like to thank Christie Chea, Eneshi Irene Kapijimpanga, Chifundo Moya for helpful editorial suggestions.

First Page

67

Last Page

105

Page Count

39

Received Date

25 November 2017

Revised Date

18 September 2018

Accept Date

19 September 2018

Online Available Date

15 November 2018

DOI

10.7172/2353-6845.jbfe.2018.2.4

JEL Code

F34; G15; H63

Publisher

University of Warsaw

Download

Share

COinS