Govt. Discussing Debt Reconfiguration with Local Banks

Prime Minister the Hon. Bruce Golding, says he expects to receive an update on discussions with financial institutions on reconfiguring the national debt, by the end of this week.
He said that discussions are being held with the banks, and the financial sector, towards a liability management programme which involves some reconfiguring of the debt. However, he noted that this will depend on the agreement of the financial institutions.
“We can’t repudiate the debt, nor can we unilaterally alter the terms and conditions of the debt. That would have to come from voluntary adjustments that are agreed to by the holders of the debt. They will indicate that that also involves the concurrence of the persons on whose behalf they hold that debt. Those discussions are continuing,” Mr. Golding explained.
The Prime Minister said that he believes the discussions will be fruitful, but suggested that they must be aggressive if there is to be any impact.
“I believe that now that interest rates have started to come down, it will assist in that process. But, what we don’t want is what happened back in 2003, when similar discussions were being held and the interest rates started to come down. Once the interest rates started to come down, the sense of urgency for a liability management programme disappeared,” he recalled.
Mr. Golding was responding to questions as to whether refinancing of the debt has been ruled out, as part of the solution to the country’s fiscal challenges, during Wednesday’s (July 29) post-Cabinet press briefing at Jamaica House.