By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The MINISTER of State for Finance yesterday lauded the Government’s recent $300 million foreign currency bond issue as a huge success, confirming it had attracted subscriptions for 20 times that amount.
Confirming previous exclusive revelations by this newspaper, Michael Halkitis said the bonds had been placed with an interest coupon of just 5.75 per cent - almost a full percentage point lower than the initially projected 6.5 per cent. This will translate into millions of dollars in debt interest cost savings.
Last December, Mr Halkitis and deputy financial secretary, Simon Wilson, went on an international roadshow with stops in London, Boston, New York and Los Angeles to test international capital market appetite for the US$300 million Bahamas sovereign bond issue
“We went to market for $300 million. We got offers for $6 billion. We were able to bring down the interest rate. The interest rate on the issue is going to be about 5.75 per cent for 10 years,” Mr Halkitis said in Parliament yesterday.
He compared this favourably to other countries in the Caribbean, namely Barbados, which had been forced to shelve a $500 million capital raising.
Mr Halkitis went on to describe the issue as one of the most successful in the Bahamas’ history, and predicted that better days were ahead for the country.
James Smith, a former minister and now a key Ministry of Finance consultant, told Tribune Business previously that with the Government projecting to spend $295 million on capital works in 2013-2014, raising foreign currency via a bond issue should enable it to finance such projects without drawing down on the existing $685 million external reserves.
Mr Halkitis yesterday said that for the first five months of the 20130-2014 fiscal year, the Government had been successful in reducing the country’s deficit.
“For the first quarter of this fiscal year the deficit has been reduced. Up to November, the latest report form the Central Bank, it’s been reduced further. There is a lot of work left to be done, particularly in the area of recurrent expenditure,” said Mr Halkitis.
Comments
banker 10 years, 10 months ago
Great another 1/3 of a billion in government debt added. And this is in foreign currency too, so the NIB can't be robbed to pay it off.
GrassRoot 10 years, 10 months ago
ok, tell me what you do with the money and I tell you whether its good or not.
GrassRoot 10 years, 10 months ago
wow we saved 0.75% of interest on 300 MM USD. So we only spend shy of 20 MM USD p.a. MORE interest p.a. Lets have a party.
GrassRoot 10 years, 10 months ago
If the Bahamas was smart they would introduce the USD as its currency. Obviously there would be some capital flight (which is happening already anyway), however we could finally stop the guessing game, why in the world ONE BSD should have the same value as a USD.
asiseeit 10 years, 10 months ago
Only a Kleptocrat would be happy and pleased to go farther into debt. The kleptocrats are now going to shove VAT down our throats and they will continue to spend and borrow until we are as poor as Haiti. DEMAND FREEDOM of INFORMATION. It is the only way to move forward. Believe it or not the Kleptocrats work for us. If they give us no Freedom of Information, then I will refuse to pay any Taxes. I am sick of The Government of The Bahamas supposedly working for the Bahamian people (what a joke they work for them and theirs) and keeping us in the dark as they rape my hard earned dollars.
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