Maldives Appoints Centerview Partners for Debt Advisory

By Karin Strohecker

LONDON (Reuters) – The Maldives has selected U.S.-based Centerview Partners as its adviser on debt issues as it strives to avoid a financial crisis, according to two sources familiar with the situation.

Concerns have escalated in recent months that the island nation might become the first to default on Islamic sovereign debt, with a $500 million Sukuk maturing in 2026 and dwindling foreign currency reserves.

As per the World Bank, the Maldives' total public and publicly guaranteed debt reached $8.2 billion, about 116% of GDP, at the beginning of this year. Half of this is external debt, primarily owed to regional rivals China and India, which have provided $1.37 billion and $124 million in loans, respectively.

In recent weeks, both countries have strengthened their support for the Maldives, alleviating investor fears about a debt crisis and aiding its international bonds.

In September, China signed a financial cooperation agreement with the Maldives to enhance trade and investment. India subscribed to a $50 million Maldives Treasury bill last month and approved currency swap deals over $750 million in October.

The Maldives' sole international bond, which fell to 66 cents on the dollar in early September amid rising debt concerns, is now trading around 80 cents, per Tradeweb data. This is above the 70-cent threshold, below which debt is regarded as distressed.

Centerview Partners, established in 2006, has recently focused on expanding its sovereign advisory business and has been hiring extensively over the past year to enhance its global operations in both Paris and New York.

The Maldives' government did not immediately respond to a request for comment.