NASSAU, BAHAMAS — The government’s medium-term debt strategy projects that it will source nearly 60 percent of its $1.7 billion gross financing requirement for the fiscal year 2022/2023 in Bahamian dollars.
The Ministry of Finance has noted that under the fiscal year 2022/23 Annual Borrowing Plan approximately 57 percent of the $1,760.8 million in funding will be sourced in local currency and the remaining $764.7 million (43.4 percent) in foreign currency.
The government however will continue to monitor domestic market conditions and investor sentiment, to capitalize on opportunities for achieving a greater proportion of the financing from domestic sources.
Prospective recourse to foreign currency borrowings will leverage policy-linked loan facilities from the International Financial Institutions (IFIs) and, to a lesser extent, commercial loans.
The Ministry of Finance noted that the $1,760.8 million—as incorporated in the June 16 Borrowing Resolution includes fundraising to close the budgetary gap of $564.0 million—and by which the government’s outstanding debt obligations are to increase, and to refinance an estimated $1,196.8 million in maturing debt securities and loans.
“A key point to note is that the budgeted fiscal outcome excludes the prospective sale of the Lucayan Resort properties, at an estimated price of $100 million, which would positively impact the government’s cash flow position and correspondingly reduce borrowing requirements.
“The government will seek to pursue a prudent mix of domestic and foreign currency borrowings that would secure progress towards the optimal debt strategy selected for the fiscal year 2022/23 – the fiscal year 2024/25.”
While the government will source nearly 57 percent of its gross financing needs in Bahamian dollars, the Ministry of Finance noted that “the government will continue to monitor domestic market conditions and investor sentiment, to capitalize on opportunities for achieving a greater proportion of the financing from domestic sources.”
“Within the Bahamian dollar financing, approximately $776.1 million is expected to be sourced from government bond and Treasury bill issuances, with the remaining $220.0 million from commercial and other domestic loan facilities.”
“Prospective recourse to foreign currency borrowings will leverage policy-linked loan facilities from the International Financial Institutions (IFIs) and, to a lesser extent, commercial loans.”
