Maldives hires American firm Centerview as debt adviser

The Maldivian government has hired Centerview Partners, an American independent investment banking firm, to be its adviser on debt matters.

Maldives has an external debt service obligation of about USD 600 million due in 2025, and more than USD 1 billion in 2026 – including a USD 500 million sukuk. Top rating agencies Moody’s and Fitch have both downgraded Maldives’ credit rating citing risk of default.

Citing two sources familiar with the situation, the global news agency Reuters reported on Saturday that the Maldives has chosen Centerview Partners to be its adviser on debt matters. However, the President’s Office spokesperson Heena Waleed did not immediately respond to a request for comment.

According to the World Bank, the Maldives' total public and publicly guaranteed debt stood at USD 8.2 billion, or equivalent to 116 percent of GDP, in the first quarter of this year.

The country is engaged is negotiations with its biggest lenders – China and India – to push back debt repayment schedules.

Both countries have in recent weeks shored up their support to the Maldives, easing investor concerns about a debt crisis and helping to bolster its international bonds.

Beijing signed a financial cooperation agreement with the Maldives in September to strengthen trade and investment. Meanwhile, New Delhi has decided to rollover two USD 50 million T-bills for an additional year, and recently approved a currency swap deal worth USD 400 million and INR 30 billion.

In its latest Maldives Development Update released last week, the World Bank said that despite Maldives’ economic growth, the increasing public debt and high fiscal spending, particularly for public sector investments and subsidies, remains worrying.

It said that the Maldives has made limited progress in implementing the fiscal reform plan in February, and stressed the need for urgent actions to reduce spending.

Maldives’ reserves fell to USD 443.9 million in August, including USD 65 million in the Sovereign Development Fund.

According to the World Bank, the foreign exchange reserves are enough to cover only one-and-a-half month of imports.

But despite the concerns, the Maldivian government has provided assurance it will honor its debt obligations to creditors and investors.