The Caribbean island of Grenada has become the first country in the world to use a “hurricane clause” in a government bond — a special feature that allows authorities to postpone debt payments in the wake of a major natural disaster, Reuters has reported.

The news agency said the move comes after Hurricane Beryl wrought destruction in parts of the Caribbean last month, including in Grenada where Dickon Mitchell, the Prime Minister, estimated that the storm had caused damage equivalent to roughly a third of its annual economic output.

The Category 4 storm made landfall in Grenada on July 1.

In a notice to the holders of one of its only international bonds, the Grenadian finance ministry said it had “elected to make a deferral claim as a result of the event”, adding that the “modelled loss” to the economy from Beryl was greater than $30 million.

Reuters said it means Grenada will not make the bond’s next scheduled payments due on November 12 and May 12 next year, which combined add up to just over $12.5 million.

Instead, the news agency said, the money will be added to the $112 million bond’s subsequent lump sum principal payments until the end of its term in 2030.

Reuters said: “The move, which will also see Grenada defer roughly another $5 million made up of a bilateral loan from Taiwan and two other smaller loans, is a landmark step.

“It is the first time a country has triggered a natural disaster clause and Grenada was the first to include one back in 2015 after a previous hurricane led to two debt restructurings in the space of a decade.”

Reuters reported a statement from Sebastian Espinosa, a debt expert at London-based White Oak Advisory, who helped develop the clause for the country: “Although no one wishes a hurricane on a country, it is good to see the natural disaster clauses that Grenada inserted into its bonds almost a decade ago doing exactly what they were designed to do.”