Turks and Caicos back in the sovereign bond market
Caribbean regional bond market institutions will discover a new investment opportunity in TCI at a financial roadshow in Trinidad & Tobago
Minister of Finance Washington Misick
TCI Ministry of Finance Acting Permanent Secretary, Shonia Thomas-Been, and Refinancing Advisor, Alex Musson, will meet with 10 regional banks, pension funds and insurance companies in Port of Spain, the regional debt capital markets centre, during the event which begins Wednesday 25 February.
“We will be presenting TCI’s dramatic turnaround to some of the Caribbean’s most powerful investors,” said Shonia Thomas-Been.
“This roadshow will test the market ahead of our debt refinancing at this time next year, by alerting financial institutions to the investment opportunity in TCI. This will also give us sufficient time to address any issues that they raise, while also helping to ensure that through open competition we secure the lowest interest rate for the TCI taxpayer.”
No deals will be agreed during the roadshow, but instead, the market will be better informed about the TCI ahead of formal negotiations beginning in autumn 2015 with the deal going through in February 2016.
The TCI government intends to refinance around US$70m of a $170m bond issued in 2011, the balance of which will be repaid from cash reserves.
Its success has been built upon a remarkable public financial management reform programme, and an economy that is predicted to grow in 2014 by 4.6% above 2013’s GDP figure of $558.9m - its third consecutive year of growth.
This economic growth has contributed to a series of recurring government surpluses in the TCI: $47.6m in 2012/13; $30.7m in 2013/14; with a projected $60m surplus for the 2014-15 financial year.
International recognition of the turnaround came when Standard & Poor’s issued a BBB+ rating to the UK Overseas Territory in the summer of 2014.
Today the TCI’s bank debt has already been fully repaid, leaving the $170m bond to be refinanced when it matures in February 2016, which will also have the effect of removing the contingent liability from the UK taxpayer. It is the TCI’s intention is to use the reserves held in its Sinking Fund to pay off approximately $100m of the bond, thus refinancing only the $70m balance.
The UK continues to provide support to TCI officials through a technical assistance programme which includes providing specialist advisers to help in areas including public financial management, tax reform and collection, government procurement, audit and private enterprise.