Maldives appoints US firm Centerview Partners as debt adviser

13 Oct 2024 | 12:32
Maldivian currency notes and Dollars

The Maldives has appointed the American firm Centerview Partners to provide advisory services on the country's mounting debt issues.

According to sources cited by ‘Reuters’, the decision comes as the country faces significant external debt obligations, with around USD 600 million due in 2025 and more than USD 1 billion in 2026.

However, no official confirmation has yet been made by the Maldivian government.

Both Moody's and Fitch have downgraded the Maldives' credit rating, pointing to a potential risk of default.

The World Bank reports that the Maldives' public and publicly guaranteed debt stood at USD 8.2 billion in the first quarter of this year, equivalent to 116 percent of the country's GDP.

The Maldives is currently in talks with its major lenders, China and India, to negotiate extensions on its debt repayment schedules.

Both countries have recently increased their financial support to the Maldives, easing investor concerns and helping to stabilize its international bonds.

In September, China signed a financial cooperation agreement to boost trade and investment, while India agreed to roll over two USD 50 million T-bills for another year.

Additionally, India approved a currency swap worth USD 400 million and INR 30 billion during President’s visit to India last week.

Despite these developments, the World Bank remains concerned about the Maldives' growing public debt, high fiscal spending, and slow progress on fiscal reforms.

In its latest update, the World Bank emphasized the urgency of implementing spending cuts, warning that the Maldives' reserves had dropped to USD 443.9 million in August, with only USD 65 million in the Sovereign Development Fund.

These reserves are enough to cover just one-and-a-half months of imports.

Despite these financial challenges, the Maldivian government has reassured creditors and investors that it remains committed to meeting its debt obligations.

Centerview Partners, established in 2006, is an investment banking advisory firm headquartered in New York, with offices in London, Paris, Chicago, and several other cities.

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