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Seychelles to snub Eurobond market

Finance minister of heavily indebted nation sees no need to access international capital markets in the coming years.

Seychelles’ finance minister Jean-Paul Adam says the island archipelago has no need to tap international capital markets in the near-term.


 We are relatively

confident that without

an IMF programme we

can be on track

Jean-Paul Adam,
Seychelles’ finance minister

Its economic reform plan – which sees debt levels to GDP fall to below 50% by 2018 compared with 177% in 2008 – currently has no provision for a Eurobond issue while market conditions are not “ideal” for international issuance, he tells Euromoney on the occasion of the IMF/World Bank annual meeting in Lima.

“There is no need for us to go to the markets," he says. "We are committed to reach a budget-to-GDP ratio of below 50% by 2018. We have no intention to issue a Eurobond currently."

Since the 2008 crisis, the country has tapped IMF funds, slashed spending and embarked on comprehensive reform programme. 

Asked whether Seychelles will request an extension of its current IMF programme, which ends in 2016, Adam says: “Our reform agenda is on track for completion by 2018, even without an IMF programme. Our FX inflows are solid, we have experienced growth in tourism arrivals and our surplus is 4% of GDP. We are more disciplined with our budget.

“So we are relatively confident that without an IMF programme we can be on track [to achieve the economic reform]. But obviously it might help, though we don’t think it’s essential. We will consider whether to extend this by end of 2016.”

In February, Seychelles secured a 5% discount on $30 million of Paris Club debt in a landmark debt-for-climate-change initiative that saw the island negotiate a partial exchange of its debt in return for financing action to ease the effects of climate change. 

Euromoney understands Jamaica is actively looking at this option. 

Adams says the Seychelles would like to secure another debt buyback for climate-change adaptation but no creditor has been forthcoming to date.

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