The Tribune

By YOURI KEMP

Tribune Business Reporter

A former Bahamas Mortgage Corporation chairman has warned against it attempting to finance Hurricane Dorian housing and infrastructure renovations by issuing new bonds.

Alex Storr told Tribune Business that the state-owned homes financier already has $100m in outstanding bond debt, much of which is scheduled to come due within the next three to five years, which meant any additional capital raising unwise.

He added that this was especially the case since the Mortgage Corporation's business model was altered to focus on financing lot purchases, as opposed to finished homes, which has resulted in reduced incomes.

Asked whether the Government should consider issuing Mortgage Corporation bonds to assist with rebuilding housing on storm-ravaged Abaco and east Grand Bahama, Mr Storr said: "I don't know, because the Mortgage Corporation has a lot of bonds out there now.

"It is something they can consider, but because how the government revamped their housing scheme, rather than building houses they have decided to sell vacant lots. I know they have over $100m in bonds out now and they are coming due; a lot of new business needs to be made. But I don't think they should consider mortgage bonds right now to help with the Dorian rebuild."

He added: "The thing is the Mortgage Corporation only makes money on the interest. Now they are making less money having to now only sell the lots at less than what it would normally sell when you are selling a home along with the lot."

The Inter-American Development Bank (IDB) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), in their post-Dorian assessment report, said that 3,000 homes are "uninhabitable".

Housing was identified as the sector most impacted by Dorian with around 9,000 homes - representing more than 11 million square feet of physical property - damaged to some degree by its winds, storm surge, falling trees and flying debris.

The joint report said: "Approximately 9,000 homes, and in excess of 11 million square feet of structures, have sustained some damage on the two islands. On Abaco, more than 75 percent of the dwellings were somehow affected, and approximately 57 percent of the houses were severely damaged.

"Central Abaco (Marsh Harbour), Treasure Cay and Hope Town were the most affected locations," the joint report found. "Damage in the social sector was $1.6bn; 85.3 percent took place on Abaco and ninety-three percent of the damage was in housing."