WILLEMSTAD – The Curaçao government assumes in its draft 2027 budget that an XCG 370 million bond loan maturing in 2030 will be fully refinanced. However, according to the Board of Financial Supervision (Cft), no concrete agreements have yet been reached with the Netherlands to guarantee such refinancing.
The Cft is also questioning whether rolling over the entire XCG 370 million is the most appropriate approach. The financial supervisor points out that Curaçao’s financial position could provide sufficient room by 2030 to repay at least part of the debt instead of refinancing the full amount.
The XCG 370 million loan is part of a series of so-called bullet loans Curaçao received in 2010 as part of the debt relief arrangement associated with the constitutional restructuring of the Kingdom. With a bullet loan, no principal is repaid during the term. The entire amount becomes due at maturity and must either be repaid or refinanced.
The Cft already warned last year that Curaçao had not built up reserves for several large repayments approaching in the coming years.
After the XCG 370 million loan matures in 2030, another XCG 475 million bond is due in 2035, followed by XCG 582 million in 2040. Together, the three loans amount to more than XCG 1.4 billion.
The financial supervisor has therefore advised Curaçao and the Netherlands to reach agreements well in advance on how these debts will be handled.
According to the Cft, the continued use of bullet loans since 2010 has not resulted in a gradual reduction of Curaçao’s debt. The Board has indicated that linear or annuity loans, under which principal is repaid throughout the term, would contribute more effectively to reducing the debt burden.
Such an approach was already used when a smaller bond matured in October 2025. Of the XCG 140 million that became due, Curaçao repaid ANG 60 million. The remaining ANG 80 million was refinanced through the Netherlands, but this time as a 20-year linear loan.
Against that background, the assumption in the draft 2027 budget that the much larger XCG 370 million debt will be refinanced in full in 2030 has drawn the Cft’s attention.
The Cft is calling on the government to develop a comprehensive debt strategy that looks beyond individual maturity dates. Such a strategy should specify how much Curaçao intends to borrow and repay in the coming years, how much can be financed from the country’s own resources and how future refinancing risks will be managed.
The strategy should also explain how the government intends to achieve its longer-term objective of reducing Curaçao’s public debt to 55 percent of gross domestic product.
Without concrete refinancing arrangements with the Netherlands, the Cft’s assessment makes clear that the treatment of the XCG 370 million obligation in 2030 cannot yet be regarded as settled.