Government to provide full disclosure on $500 million IDB backed loan says Halkitis

Government to provide full disclosure on $500 million IDB backed loan says Halkitis

NASSAU, BAHAMAS — Economic Affairs Minister Michael Halkitis said that the government will fully disclose all details regarding the $500 million commercial loan secured via an Inter-American Development Bank guarantee last month, as mandated by law, noting that these details will be included in the upcoming quarterly debt statistical report.

The Opposition has continued to express concerns over the government’s recent announcement regarding a $500 million commercial loan secured via an Inter-American Development Bank (IDB) guarantee and has called for full disclosure of the arrangement.

Halkitis informed Eyewitness News: “We are obligated to table a quarterly debt statistical report 30 days following the end of each quarter. The report for January has been completed and it will be fully reported in the statistical digest at the end of March. The only reason for the delay is due to an innovative structure where we utilized a guarantee provided by the IDB along with a commercial bank. The IDB provided the guarantee, enabling us to borrow at a lower cost. The commercial bank partner then packages the loan and sells it to their clients. There is a period where they would prefer we not divulge all the details while they market it; it’s called the seasoning of the debt. We are obligated by law to disclose all government debt.”

Back in mid-January, the government announced what it described as a “landmark transaction” and the country’s largest credit-enhanced financing on the international loan market to date, representing over 50 percent of external borrowing requirements for Fiscal Year 2023-24, noting that it will fund eligible budgetary expenses, such as infrastructure, education, and social welfare projects.

The government noted that the IDB’s first-loss Policy-Based Guarantee will initially cover up to 40 percent of the scheduled principal and related interest, allowing the IDB to develop an innovative structure with a multiplier effect in which, through a partial risk assumption, the private sector, led by (Banco) Santander, is able to lend a much larger nominal amount.