NASSAU, BAHAMAS — The ‘positive momentum’ for Bahamas Power & Light’s (BPL) Rate Reduction Bond prior to the onset of the COVID-19 pandemic ‘has not dissipated’, according to Works Minister Desmond Bannister.
Bannister said the utility must now wait for a more ‘favourable window’ to put the bond to market.
He suggested there was in an active investor appetite for the bond offering noting that it was a strong step towards assisting BPL in ‘righting the ship’.
“For the past year BPL and its advisers have worked to complete this transaction with much assistance from the government of The Bahamas and the Ministry of Finance in particular,” Bannister said.
“The bond quantum amount of $535 million was recently approved by Cabinet and the use of proceeds rubric has been adjusted to reflect this. In addition Singapore has been approved for listing the bond and an engagement letter has been executed. The boards of Bahamas Rate Reduction Bond Limited and continue to work along with many company executives to be in a state of readiness once the markets impacted by COVID-19 re-open so that the transaction can be brought to a favorable conclusion,” said Bannister.
The Bahamas Rate Reduction Bond Ltd is the special purpose vehicle that will be responsible for issuing the bonds and making investor interest payments.
“The positive momentum for the for rate reduction bond prior to COVID-19 has not dissipated. A change in circumstances means only that BPL must wait for a more favourable market window to open,” said Bannister.
He noted that the utility is receiving assistance from the government to cover its revenue shortfall as many customers have not paid or been unable to pay their bills in light of the fall-out from the pandemic.