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Government Successful at Issuing a Benchmark US$750 Million Bond Issue

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#Bahamas, November 18, 2017 – Nassau – Deputy Prime Minister and Minister of Finance the Hon. Peter Turnquest gave details in the House of Assembly of the Government’s recent success at issuing a benchmark US$750 million bond issue, which has been opened to the markets and priced, and is expected to close on November 21, 2017.    He made the statement on Wednesday, November 15, 2017.

DPM Turnquest also took the time to set the record straight in response to numerous reports in the Press and social media about the transaction, which characterised it as “lacking in transparency and fiscal prudence.”

“Nothing could be further from the truth.    There was absolutely nothing devious, surreptitious or imprudent about this transaction or the manner in which it was handled.    There are certain ways these transactions are handled in the international market, and we are appropriately guided by our investors in this regard,” he told the Members of Parliament.

DPM Turnquest explained that all of the Government’s financing activities are conducted within the constraints of its approved borrowing authorities, and shaped and informed by pragmatic debt management strategies.

“These strategies, for example, take into consideration the size and currency composition of the Government’s financing requirements; the identification, analysis and preferences of potential funding sources—whether it is best to source the debt in domestic or foreign currency; and, of course, with due consideration to market liquidity, cost and risk factors.

“To be sure, such analysis and evaluation requires interaction with other agencies—especially our bankers, and most certainly the Central Bank.   As is customary, we collaborate very closely with the Central Bank, which manages the issuance of government paper in the domestic market, for advice on domestic liquidity conditions—how much excess loanable funds are in the system, and what is the appetite of the main investors in government paper—the banks and institutional investors (pension funds and the insurance companies) to increasing their holdings.”

He said these factors, including foreign reserves considerations, not only influence the timing and size of potential issues, but also determine decisions on whether borrowings are undertaken in domestic or foreign currency.    Such decisions involve serious and considered deliberations by the Government in managing the country’s debt.   The DPM noted that during the 2017/18 Budget Communication, two borrowing resolutions were approved by the House.

The first covered the additional funding approval of $400 million to settle the outstanding arrears for FY2016/17 and the second was in respect of FY2017/18, and provided for financing to cover the overall budget deficit, estimated at $322.3 million, and refinancing/debt repayment obligations, which are now projected at $600.2 million.

He said, “Therefore, while the total borrowing envelope under these two approved resolutions totaled approximately $1,322.7 million, the increment to the outstanding debt was and remains $722.3 million, as the $600.2 million in refinancing/debt repayment would have a neutral impact on debt levels.”

DPM Turnquest also noted that it is instructive to mention, that, at the beginning of each Fiscal Year, one of the first things that the Government sets out to do, through its Treasury Department, is to develop monthly cash flow projections—based on how it perceives the evolution of revenue performance and the timing of its outlays.

“These projections are calibrated, on an ongoing basis, to ensure that there are sufficient funds available to meet the Government’s budgetary requirements, as and when needed.

“It is now common knowledge that there were pressing funding needs at the end of the past fiscal year and the outset of the current period, which placed an urgent requirement on policymakers to identify immediate funding sources to meet these obligations.”

He said after an evaluation of the funding options, the Government moved expeditiously to source several short-term bridging facilities, which included US Dollar bank credits ($450 million) and domestic treasury bills and bank advances ($300 million).

“I want to emphasize that these facilities were always contemplated to be short-term in nature, with a subsequent “terming out”, i.e., lengthening of the maturities to achieve a more favourable debt servicing profile. And having considered conditions in the domestic market, and the number of significant rollovers contemplated, the intention was to explore the possibility of rolling up these short-term credits into an international bond issue.”

The bonds, characterized as a 10-Year weighted average life bond, was priced at a coupon or interest rate of 6.00 per cent, which is some 250 basis points above the pricing obtained in the Government’s last bond issuance in 2014 when it enjoyed investment grade credit status.

It is to be repaid in three equal annual installments, commencing on November 21, 2026, and with a final maturity on November 21, 2028.   T he 6.00 per cent yield is equivalent to a spread of 362.1 basis points above the US Treasury’s 10-year benchmark bond.

The Deutsche Bank Securities Inc. and RBC Capital Markets, LLC. managed the offer as joint book runners.

By: Llonella Gilbert (BIS)

 

 

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Caribbean Bottling Supports the 27th Basketball Smiles Week  

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NASSAU, Bahamas — Caribbean Bottling Company (CBC), local producers of Coca-Cola and Dasani products, is proud to once again support Basketball Smiles for their 27th year.

Upholding its corporate pillar of community outreach, CBC proudly donated $2,000, over 75 cases of Dasani, Powerade and Sprite, reusable Powerade water bottles and numerous marketing materials.

The annual sporting summer camp offers free basketball and life skills training to Junior and High School students.

Basketball Smiles’ mission of developing leadership qualities while fostering children’s academic achievement and self-esteem aligns perfectly with CBC’s commitment to supporting and empowering youth.

Jazmin Darling, Assistant Marketing Manager for Caribbean Bottling Company shared why the company continues to support this program each year.

“At CBC, we believe investing in our youth is one of the greatest ways to strengthen our communities. We’re proud to support Basketball Smiles each year because it goes beyond the game. This program champions healthy lifestyles, positive values and brighter futures. It’s a privilege to play a role in helping these young athletes reach their full potential each year,” she shared.

Sam Nicholls, Basketball Smiles Camp President and Founder expressed.

“Caribbean Bottling Company is an incredible partner. We are truly grateful for their generous support, which will go a long way in making a positive impact on the lives of our campers,” Nicholls expressed.

CBC is always ready to lend its support toward initiatives and programs that uplift young Bahamians. The impact Basketball Smiles makes on the community is undeniable and is why CBC remains a historic sponsor.

For more information on sponsorship, events and new products, visit www.cbcbahamas.com today.

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CWS Supports Transforming Spaces with Premium Products and Unique Cocktails

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CWS brand representative for Bottega and Excellsior wines posing with attendees enjoying glasses of Bottega Gold Prosecco at the National Art Gallery of The Bahamas.

NASSAU, Bahamas — Caribbean Wines and Spirits (CWS), The Bahamas’ premier wine and spirits distributor is thrilled to once again lend its support to Transforming Spaces (TS).

CWS is a proud historical partner of the annual art week which highlights Bahamian art and art spaces. Under this year’s theme, “Chasing Light” Transforming Spaces and Caribbean Wines & Spirits created a memorable art experience.

To mark 21 years of the upliftment and exposure of culture and Bahamian art, CWS offered award winning wines St. Francis, Rebellious, Bottega and Excellsior; premium spirits, Cross Keys Gin, El Tequileno Tequila, Angostura Rum and Nemiroff Vodka, along with the newly added Coors Light Beer from its portfolio.

To kickstart the annual art week, CWS delighted attendees with a tasting of globally renowned Bottega Wines at TS’ Poetry Jam, held at ICE Bahamas. Throughout the event, Bottega brand representatives shared tasting notes, ideal pairings, and insights into the brand’s portfolio.

During the highly anticipated Saturday and Sunday tours, CWS showcased its premium products at select art galleries.

Attendees enjoyed Rebellious and St. Francis wines at The Current: Baha Mar Art Gallery and Museum, Bottega and Excellsior wines at the National Art Gallery of The Bahamas, Coors Light beer at the University of The Bahamas Pro Gallery and hand-crafted Schweppes mixes featuring Cross Keys Gin, El Tequileno Tequila, Angostura Rum and Nemiroff Vodka at CAB Gallery & Studio.

Throughout the two-day tour, CWS product specialists enriched the experience by providing a deeper appreciation for their exceptional beverage portfolio.

Members of the Transforming Spaces Committee expressed their appreciation towards CWS’ support after another successful art week.

“Transforming Spaces is deeply grateful for the continued support of Caribbean Wines & Spirits over the years. Their partnership has become such an important part of the TS experience, helping us create welcoming and vibrant moments for our audiences across the tour weekend. From signature wines and cocktail bars to refreshments at gallery stops and pop-up events, their contribution brings an added sense of hospitality, celebration, and connection to the journey through Bahamian contemporary art.” — TS2026 Committee.

Caribbean Wines & Spirits is proud to partner with Transforming Spaces in supporting and elevating the voices and works of Bahamian artists and looks forward to strengthening this partnership for years to come.

To learn more about CWS’ involvement in the community, follow on social media @caribbeanwinesandspirits or visit the website at www.cwsbahamas.com today.

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Caught in the Net, Not Accused of Wrongdoing

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What the Attorney General must do now to protect Bahamian exports

Deandrea Hamilton | Editor

NASSAU, Bahamas — The United States’ decision to impose a 12.5 percent tariff on Bahamian exports is about more than higher costs for seafood, rum and other goods entering the American market. It is a warning that The Bahamas must move quickly to strengthen or clarify its legal framework governing forced labour and supply-chain enforcement.

The tariff, which takes effect July 24, is part of a sweeping U.S. trade action affecting 60 economies following a review by the Office of the U.S. Trade Representative (USTR). The review concluded that the listed countries have not adequately prohibited or enforced measures against goods linked to forced labour in global supply chains.

The action follows a recent U.S. Supreme Court ruling that invalidated an earlier series of Trump-era tariffs imposed under emergency powers. In response, the Trump administration shifted to a different legal authority—Section 301 of the Trade Act of 1974—using findings from a U.S. Trade Representative investigation into forced-labour compliance to support a new round of tariffs affecting 60 economies, including The Bahamas.

Importantly, the action does not accuse Bahamian businesses of using forced labour. Instead, it reflects the U.S. view that The Bahamas’ legal or enforcement framework does not yet meet the standard Washington expects.

That distinction matters.

The Attorney General’s Office now has the responsibility to lead the country’s legal response. That begins with determining precisely what concerns the U.S. Trade Representative identified, reviewing whether Bahamian law adequately addresses those concerns and, where necessary, recommending legislative or regulatory changes. If deficiencies exist, legal amendments and stronger enforcement could help position The Bahamas for removal from the tariff list.

The government may also seek formal discussions with U.S. officials while those reforms are undertaken, outlining a clear timetable for compliance and demonstrating that the country is committed to meeting international labour standards.

A Nassau Guardian front-page report on July 24 drew attention to the tariff action, prompting broader questions about why The Bahamas was included among the 60 economies affected by the U.S. trade measure and what steps are now needed to restore full confidence in the country’s trade framework.

For many Bahamians, the immediate concern will be the fisheries sector, one of the country’s largest export industries. Commercial shipments of lobster, conch, fish, crawfish and other products entering the United States could become more expensive because of the additional tariff, potentially affecting exporters’ competitiveness.

The broader lesson is that international trade increasingly depends not only on quality products, but also on strong business relationships and confidence in the legal systems that govern them.

For The Bahamas, this is less a finding of wrongdoing than a reminder that international credibility is earned through modern laws, effective enforcement and trusted partnerships. The challenge now is for the Attorney General’s Office to lead a swift legal review, identify any deficiencies and chart a clear path toward compliance so Bahamian exporters are not burdened any longer than necessary.

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