After continually failing to pay its loans, Cuba’s deadbeat Castro dictatorship offered debt relief deal by creditors

There is no other way to put it: Cuba’s Castro dictatorship does not pay its debts. And here we have just another example of the exorbitant costs (both economic and moral) associated with doing business with the apartheid Castro dictatorship. Unfortunately, many businesses and chambers of commerce in the U.S. will nevertheless ignore it.

This is what awaits American businesses and taxpayers if we drop sanctions and extend credit to the Castro regime.

Via Voice of America:

Cuba Creditors Offer ‘Very Significant Relief’ in Debt Proposal

Cuba’s commercial creditors have offered “very significant debt relief” in a proposal sent to cash-strapped Havana in late January, according to two advisers to the group, in a sign that holders of the defaulted debt are ready to ramp up the pressure.

The communist-run island has seen its financial situation deteriorate in recent months following the deepening of Venezuela’s economic crisis, lower revenue from commodity and related exports, devastation wrought by Hurricane Irma and tightening of business and travel restrictions by the U.S. administration under President Donald Trump.

In 2015, Cuba reached a debt deal with members of the Paris Club of creditor nations, but having not dealt with its defaulted commercial creditors in the London Club means the country is in effect shut out of international capital markets.

“The committee reached out to Cuba in late January,” said Rodrigo Olivares-Caminal, coordinator of the creditor group and a law professor at London’s Queen Mary University. “We have made a good faith proposal to the government.”

The creditor group holds obligations representing a face value of $1.4 billion worth of Cuban debt and is made up of three funds — Stancroft Trust Ltd, Adelante Exotic Debt Fund Ltd and CRF I Ltd — as well as one commercial bank.

“We are trying to give the country another chance to reach an amicable understanding with creditors,” Olivares-Caminal told Reuters. “This would give them very beneficial terms to remedy their situation vis-a-vis capital markets.”

While details of the proposal were confidential, it would convey “very significant debt relief” said Lee Buchheit at Cleary Gottlieb Steen & Hamilton LLP, one of the world’s top restructuring lawyers who was retained by the group last year.

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