The government has paid off about USD 25 million in interest owed to investors on USD 500 million Sukuk.
The Finance Ministry did not officially disclose this information, but Adhadhu can confirm that USD 24.6 million was paid as interest payment due by tomorrow.
The Sukuk was sold at an interest rate of 9.875 percent. This means that the government has to pay USD 49.3 million in interest annually until the Sukuk is paid off. These payments are made in two parts, at the beginning of the year and at the end of the year.
Paying interest on the securities sold by the Maldives earlier than the due date will help maintain the value of the Sukuk and gain investor confidence. This will also allow the price of the Sukuk to rise.
The government has paid the money at a time when international rating agencies such as Fitch and Moody's have downgraded the Maldives credit rating due to a high risk of debt default.
Following the credit downgrading, international media earlier reported that the Sukuk sold by the Maldives could be the first ever in the world to default. This resulted in a sharp drop in the Sukuk price.
However, the Sukuk are now trading at a better price in the international market. The Sukuk is currently trading at 76 cents per dollar. At its lowest, the price fell sharply to 66 cents per dollar.
The main reason for the rise and stabilization of the Sukuk price was the postponement of the payment of a USD 50 million bond to the State Bank of India (SBI) to next year.
