The Maldives government has confirmed that about USD 25 million was paid off in interest owed to investors on USD 500 million Sukuk.
Adhadhu reported on Sunday that USD 24.6 million was paid as interest payment. The amount was due by today.
In a press release issued on Monday, the Finance Ministry said the USD 500 million senior unsecured Sukuk issued in 2021 is set to mature in 2026.
It added that the "Sukuk pays a semi annual coupon." The payments have to be made in April and October of each year.
"As of 7th October 2024, the government has successfully settled the latest coupon payment," it stated.
Adhadhu understands that 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.
The Finance Ministry further said that honoring debt service payments is a key priority for the government.
"The timely settlement of this coupon payment underscores the government's commitment to meeting its debt obligations to creditors and investors."
Paying interest 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 made the payment after international rating agencies such as Fitch and Moody's downgraded the credit rating due to a high risk of debt default.
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. 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.
