News Release No. 1/12
January 6, 2012 No. 1/12-BD ST. KITTS AND NEVIS TO GET FINANCIAL ASSISTANCE PACKAGE FROM CDB The Board of Directors of the Caribbean Development Bank (CDB) has approved a package of exceptional financial assistance for the Government of St. Kitts and Nevis. Provision of a guarantee equivalent to USD12 million on a portion of the Government's restructured debt, conversion of a previously approved Policy-Based Guarantee into a loan equivalent to USD8.3 million, and conversion of the outstanding balance of four previously approved loans from the Bank's Ordinary Capital Resources to concessional loans are some of the elements of the assistance package. This financing is intended to assist the Government in achieving debt sustainability by facilitating a debt restructuring exercise as part of a comprehensive strategy that includes revenue enhancement and expenditure reducing measures. In July 2011, the Government of St. Kitts and Nevis entered into a three-year Stand-By Arrangement with the International Monetary Fund with one of the principal objectives being that of placing the country's public debt on a downward trajectory. CDB's financing is, therefore, intrinsically linked to the achievement of that objective. CDB's provision of this financing is part of the Bank's broader assistance strategy for St. Kitts and Nevis. This strategy seeks to improve the country's debt dynamics, enhance public sector management systems to generate improved outcomes, foster fiscal sustainability and improve the overall macroeconomic fundamentals, while protecting the gains of the past.