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The Firm recently represented Bear, Stearns & Co. Inc., as dealer-manager, in a restructuring of substantially all of the external and domestic sovereign debt of the Government of Grenada.  Under an exchange offer, Grenada offered U.S. Dollar Bonds due 2025 and E.C. Dollar Bonds due 2025 for outstanding U.S. dollar- and E.C. dollar-denominated debt, respectively.  Holders tendered approximately 85% of the aggregate principal amount of outstanding eligible debt in the exchange offer.

The restructuring was necessitated after Hurricane Ivan, a massive Category 5 force storm, struck Grenada in September 2004.  The hurricane destroyed or partially damaged 90% of the houses in the country.  The storm also decimated the principal economic sectors of the country (tourism and agriculture).  The total cost of the damage to Grenada was estimated to be more than 200% of the country's gross domestic product.  As a consequence of the hurricane, Grenada ceased servicing substantially all of its sovereign debt.

The bonds offered in the exchange offer, in effect, reduce interest rates and extend maturity dates of Grenada's debt.  The interest rate on the new bonds increases from 1% to 9% per annum over the term of the bonds.  Grenada is required, under "debt management" provisions of the bonds, to retire or redeem 20% of the principal amount of the bonds in each year from 2021 through 2024, with the final maturity date falling in 2025. 

The Simpson Thacher team for the transaction consisted of Glenn M. Reiter, Juan Francisco Méndez, Alireza Odouli and Anthony McMahon (summer associate).