The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading investment banker yesterday said he expected 2014 to be “similar” to this year in terms of capital raising, with more than $130 million obtained from Bahamian capital markets investors over the past 12 months.

Michael Anderson, RoyalFidelity Merchant Bank & Trust’s president, told Tribune Business the institution had already talked to “a number of people” interested in going to the capital markets for financing to expand their businesses.

He said the demand for funds was based on optimism that the Bahamian economy would grow, stimulated by the $2.6 billion Baha Mar project’s first full year of operations in 2015.

“Next year will be a continuation of what happened this year. I anticipate that next year will be much the same again,” Mr Anderson told Tribune Business of the capital markets.

After a 2012 marked by little to no capital raising, the RoyalFidelity chief said more than $130 million was obtained from the Bahamian capital markets via a combination of Grand Bahama Power Company’s $32 million preference share issue; Fidelity Bank (Bahamas) $10 million note issue; the $36 million Arawak Port Development Company preference share offering; and the $48 million Public Hospitals Authority (PHA) bond. RoyalFidelity is also currently working on a $6 million private placement.

Mr Anderson said 2014 could see even more offerings, and capital raisings, than this year depending on what happened with the Bahamas Electricity Corporation (BEC) restructuring/privatisation.

With the winning bidders required to refinance a $350 million debt mountain, including $180 million in government-guaranteed debt, the RoyalFidelity chief said it was possible they may come to the Bahamian capital markets for a chunk of this money.

But, setting this aside, Mr Anderson said many Bahamas-based businesses were starting to ready themselves for Baha Mar and the likely “growth of the underlying economy” as a result.

“There will be opportunities for new and existing businesses to expand,” he told Tribune Business. “We’ve had a number of conversations with parties talking about raising capital next year.

“There’s always a lag between talk and when a transaction occurs, but we would be looking at a year not dissimilar to last year.”

Mr Anderson said the capital markets tended to lead economic recovery cycles, as businesses prepared to exploit growth opportunities.

“Capital markets are typically front-end in economic recoveries, and at the back end,” he added. “I believe we’re at the start of the recovery, Baha Mar will be a significant part of that, and the growth in the economy will cause people to come to market to raise capital.”