NASSAU, BAHAMAS — The government plans to tap the international capital markets for $700 million, which represents the bulk of its foreign currency borrowings for fiscal year 2021/2022, according to its annual borrowing plan.
The plan, which was released yesterday, noted that of the $959.2 million proposed in foreign currency borrowings, $700 million or 73 percent is to be derived from the international capital markets — representing the bulk of the overall financing at 37.8 percent.
According to the plan: “Government proposes the issuance of an aggregate US$700 million in external bonds, capitalizing on the strengthening market demand fundamentals and exploring structuring alternatives that would result in efficient pricing.
“The government will leverage a prospective US$200 million guarantee from the IDB (Inter-American Development Bank) to scale up fundraising in the international capital market.
“Subject to market conditions, and to reduce funding risk, bond raising initiatives will be positioned in the first half of the fiscal year. Bond maturities will be selected to minimize future refinancing risk. Bonds will be fixed rate to reduce the government’s exposure to interest rate risk.
“Aside from these indicative transactions, the government will explore liability management opportunities for its existing portfolio of bonds.”
The plan also outlined that of the proposed $259.2 million in foreign currency loans, US$19 million is to be sourced from a commercial bank, leveraging a multilateral guarantee, which will enable the government to secure more favorable pricing.
The government also intends to seek funding from an international financial institution in the amount of $160 million, which is proposed for the second half of the fiscal year.
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