By Ank Kuipers and Brian Ellsworth
PARAMARIBO/CARACAS (Reuters) – Suriname on Tuesday said lenders were taking a”confrontational attitude” toward debt restructuring discussions after bondholders rolled a deal to delay payments, escalating a dispute between investors and the tiny South American nation.
A creditor committee, which comprises Franklin Templeton, Eaton Vance (NYSE:-RRB- and Greylock Partners, on Monday said it had triggered a”termination clause” on notes maturing 2023 and 2026, scrapping a strategy struck in April to defer payments on the securities with an outstanding balance of $675 million.
The dispute in part hinges on the handling of future oil revenue from recent crude discoveries. Suriname says it is too soon for those funds to look on its own books, while lenders insist that they ought to be a factor in the debt discussions.
Suriname’s finance ministry said that it”regrets the non-constructive and confrontational attitude.” It added that there wasn’t any substitute for creditors accepting a reduction.
In response to the bondholders’ decision, Suriname’s opposition parties on Tuesday said they fear for Suriname’s international reputation now the government cannot meet its financial obligations.
President Chan Santokhi, who was elected in 2020, said in a National Assembly session that his government assumed office with a debt at 160% of GDP.
“We have provided our proposals. They’ve responded that they do not agree with this, is that the end of the world? No,” Santokhi said. “We are demonstrating leadership, and we are continuing to negotiate.”
Creditors said the 70% haircut proposed by Suriname does not take into account its capacity to pay nor the country’s own description of its”bright financial future.”
Suriname’s bond prices were little changed on Tuesday but have dropped sharply since the government proposal early this month.
Bondholders also have complained about not being sufficiently involved in Suriname’s discussions with the International Monetary Fund for a $690 million funding deal.
Suriname says adding prospective petroleum earnings in its current financial models would be inconsistent with IMF guidelines, which it provided creditors with ample details of its financial circumstance.
It Wasn’t immediately obvious what legal activities, if any, the cr
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