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Howai: $4.9b bond to offset highway costs
A $4.9 billion bond earned on the international capital market will be used to offset the costs associated with the Point Fortin Highway and payments to the Brazilian contractor, OAS Construction. Finance Minister Larry Howai yesterday said the bond earning, the first of its kind for the country in over seven years, would also be used to offset cost of new construction projects.
The bond saw almost ten times the subscription necessary. This was the country’s return to the international market after more than seven years. The deal was a result of a partnership between T&T and banking group Citi. Howai and Citi’s country officer for T&T, Barbados and Bahamas, Catalina Herrera spoke with the media at the Ministry of Finance, Port of Spain to detail what the deal meant in terms of income for the country.
“Some of the new projects, things like road construction and construction of the new hospital and new oncology centre which we are seeking to build,” Howai said, would also benefit. He said the the bond was issued on the international market despite the high levels of liquidity both in the US and local money markets.
“With respect to TT dollar liquidity, we do intend to issue other bonds on the local market, we did a $1 billion three months ago and we also did a $1.5 billion in September, so there have been a couple of issues come onto the local market,” he said. Howai said in the last few weeks, he went to Parliament to increase the amount on the open market operations for both Treasury bills and Treasurynotes which offer longer term yields. “These also will be available to the Central Bank on the local market,” he said.
Howai said the success of this international bond would not have been the same if opened on the local market. “Issuing on the international market actually opens up market investors to bond issue as well as provides them with a lot more liquidity than they would have had if it was issued only in the Trinidad market,” he said. The bond was done at the lowest interest rate obtained by T&T in the international market. Herrera said since the issue, the bond performed similarly to other “highly oversubscribed sovereign bond issues”.
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