The US$1 billion ten-year bond successfully launched by the T&T Government in New York on Thursday is its first international bond issue in three years.
The bond issue was formally opened to orders at 8 am and by 10:30 am, it was more than three times oversubscribed, with US$3.5 billion in orders received from more than 250 international investors, thus allowing the country to comfortably raise the targetted US$1 billion, with prospects for raising additional amounts in excess of the required US$1 billion, an official release from the Ministry of Finance stated.
The statement continued: "The original price for the bond was set at 4.625 per cent. However, the significant interest and demand from international investors buttressed by strong demand from the local investor community, allowed the final price of the bond to be tightened to 4.5 per cent. This pricing is reflective of the confidence of investors in the Government's management of the economy and the medium term fiscal and monetary outlook. The 4.5 per cent interest cost of the bond compares very favourably with recent Government bond issues."
The Ministry release said the pricing of the bond followed a comprehensive roadshow in the major world financial centres of Los Angeles, London, Boston and New York over the period July 25 to 27. It involved one-on-one meetings with over 30 targetted investors in different locations, where presentations were made followed by robust question-and-answer sessions on the T&T economy, revenue and expenditure, fiscal and monetary policy, oil and gas production, state enterprises, macroeconomic policy, foreign reserves, debt management, management of the T&T currency and the exchange rate, among other things.
The delegation for the roadshow was headed by Finance Minister Colm Imbert and included the Finance Secretary, Tobago House of Assembly, Joel Jack; Adviser to the Minister of Finance and former Governor of the Central Bank Ewart Williams; Permanent Secretaries in the Ministry of Finance, Maurice Suite and Suzette Taylor-Lee Chee; two senior managers of the Central Bank and assistant director, Economic Management Division, Ministry of Finance, Sandra Fraser-James.
The delegation was split into two teams, with one team headed by Imbert travelling to Los Angeles and New York and the other team headed by Suite travelling to London and Boston, with both teams rejoining in New York on Thursday.
The joint lead managers for the bond issue were Deutsche Bank and First Citizens Bank, with FCB's CEO Karen Darbasie, heading the First Citizen's team who, among other things was charged with the responsibility of building the local investor book, since, in keeping with initial objectives, a portion of the bond was earmarked for local investors.
Proceeds of the bond are to be utilised to finance T&T's development programme over the rest of this fiscal year as well as over the 2017 fiscal year.