Govt taps overseas investors for another US$225 million

NASSAU, BAHAMAS — The Ministry of Finance confirmed last night that the government has raised an additional $225 million from overseas investors via a bond offering less than two months after tapping the international capital markets for US$600 million.

The Ministry of Finance said in a statement last night that the US$225 million in proceeds will be used to finance the government’s general 2020/2021 budgetary needs, and falls within the $1.334 billion in approved financing for the fiscal year.

According to the Ministry of Finance, the government was able to take advantage of a significant rally witnessed in the 2032 Notes, to successfully launch a US$225 million reopening of these Notes.

“The transaction was well received by the market. The order book was multiple times oversubscribed with more than 75 global investors participating in the final transaction. Underscoring the markets’ strong and growing interest in The Bahamas’ credit, the reopening exercise priced at a yield of eight percent — 125 basis points less than the 9.25 percent obtained in the October 2020 transaction,” it noted.

It was further noted that the other terms of the Notes remain the same as the October transaction, carrying an 11-year weighted average life with a coupon (interest rate) of 8.95 percent per annum. The transaction represents the government’s second transaction in the international debt capital markets for the 2020/21 fiscal year, both of which were led by Credit Suisse Securities (USA) Inc.

Opposition Shadow Finance Minister Chester Cooper said in a statement yesterday that the government had made no previous communication about its intention to go back to the international capital markets.

“This would bring the total borrowed from US financial markets to more than $800 million in six weeks. We are, of course, well past $1 billion in net borrowing so far this fiscal year. The projected borrowing for the entire year was $1.3 billion. We are certain to exceed that number at this current clip as we [are] also borrowing locally. We noted the high interest, as anticipated following the recent downgrades. We spoke to this extensively at the recent borrowing of the $600 million sourced a few weeks ago. The public deserves to know how much money the government intends to source from international markets and what total borrowing is expected to actually be,” said Cooper.