International Monetary Fund Working Paper No 17/171

The following is the Working Paper No 17/171: Sovereign Debt Restructurings in Grenada: Causes, Processes, Outcomes, and Lessons Learned. Author/Editor: Tamon Asonuma; Xin Li; Michael G Papaioannou; Saji Thomas. Publication Date: 24 July 2017.


Summary: This paper documents the 2 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 2 restructurings provided liquidity relief, with the 2nd 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.


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