Dominican Republic exchanges debt relief on bonds
by Brian Turner
The Dominican Republic took steps on Wednesday to get some relief on its debt by a $1.1 billion exchange on two bond issues.
This move postpones interest payments due this year and next, and extends the maturity of the country’s debt, thus letting up on its immediate cash burden. The interest payments were added to the principal on the new bonds.
The markets took the deal well, with analysts calling the deal good for the government and an acceptable deal for investors.
The deal was part of the conditions imposed by the Paris Club to bring debt relief to the nation.
Leonel Fernandez, the president of the Dominican Republic called the deal a success even though the government still must reach a settlement with bondholders who did not agree to the exchange.
Bondholders who did agree to the deal will receive $456 million in 9.5 percent amortizing bonds due in 2011 and $574 million in 9.04 percent amortizing bonds due in 2018. The swapped-out bonds had been due in 2006 and 2013.
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