ST GEORGE’S, Grenada, Thursday March 7, 2013 – According to reports in the New York Post, China’s Export-Import Bank filed a lawsuit in a New York federal court on Monday (March 4) to recover outstanding monies owed to it.
The lawsuit is reportedly over an unpaid judgment worth US$32 million against Grenada, which the Chinese state-controlled bank is still trying to recover.
In February last year, the Grenada airport was almost crippled when Taiwan’s Export-Import Bank started to garnish millions of dollars in airline landing fees to aid it in recovering US$25 million in outstanding loan payments awarded to it by a New York court.
Although China’s Export-Import Bank did not restructure its Grenada claims when others did in 2005 and 2006 when other creditors agreed to take big ‘haircuts’ on the debts owed to them, the bank is reportedly now using the “equal treatment” legal argument pioneered by Paul Singer’s Elliott Management against Argentina to argue that Grenada must pay it each time the country makes a payment to creditors.
However, analysts are saying that Grenada is likely to default on its debt again soon, which could complicate China’s attempts at recovering its debt.
Grenada has paid more than US$43 million to the other creditors since its last default, but the New York Post quotes emerging market debt hedge fund manager Hans Humes as saying that the Caribbean island is likely to miss its next coupon payment, which is due next Friday (March 15).