(Trinidad Guardian) Minister of Finance, Colm Imbert, says T&T raised US$750 million in a 10-year bond on the international capital market yesterday “without difficulty.”
In a news release yesterday, the Ministry of Finance said the bond was finalised in the amount of US$750 million (the target amount) at an interest rate of 6.40 per cent (the target yield), which was just about 2 per cent above yesterday’s opening rate of 10-year US Treasury Bills.
The bond offer, which stayed open for only two-and-a-half hours, was oversubscribed by 280 per cent, according to the ministry’s news release.
“A Government bond with a prospective offer size of US$750 million was thus launched with an initial rate in the high 6 per cent range on the Bloomberg Electronic Platform at around 8:45 am (yesterday) morning.
“By 11:15 am, when the decision was taken to close the book on the bond, we had received offers totaling US$2.1 billion, an oversubscription of 280 per cent,” said the Ministry of Finance.
Providing background on the bond offer, the ministry said it held a nine-hour virtual roadshow on Monday, when Imbert made a presentation on seven occasions throughout the day to international investors on T&T. He fielded questions on the management of the domestic economy from 53 of the most prestigious asset managers in the USA and Europe.
The roadshow on Monday started at 8:00 am and went until 5:00 pm, virtually nonstop. It involved intense scrutiny and questioning by international investors of the Minister of Finance on the country’s credit rating, its country’s financial situation, diversification, revenue and expenditure, future prospects for oil and gas production, foreign exchange inflows and interventions, management of our exchange rate, foreign reserves, the Heritage and Stabilisation Fund, environmental, social and governance issues, human development, climate change, political stability, democracy, procurement, accountability, the rule of law, among many other pertinent issues.
“The roadshow went well and Minister Imbert was able to successfully answer the questions asked, to the satisfaction of international investors,” according to the ministry.
The ministry noted the interest rate of 6.4 per cent over 10 years achieved by the Ministry of Finance, was just about 2 per cent above yesterday’s opening rate of 10-year US treasury bills.
He said the margin over US treasury bills was a much better rate than could possibly be achieved by most countries in Latin America and all of Caricom.
“Colombia for example, has a spread of 6.5 per cent over US treasuries today, meaning that they would have to borrow at 10.80 per cent if they approached the international market (yesterday). Mexico’s spread over US treasury bills is 6.25 per cent (yesterday), which means they have to borrow at 10.55 per cent,” said the ministry.
“The excellent performance of our US$750 million international bond offering (yesterday) is confirmation of the confidence that the international financial community has in the Ministry of Finance and the Government of Trinidad and Tobago,” the news release said.
Imbert thanked and congratulated his team in the Debt Management Division at the Ministry and the offer’s sole lead manager/book manager J.P. Morgan for the great work they did on the international bond, “which was planned and superbly executed in only one month.”
Yesterday’s bond issue was the second time in less than a year T&T sought funding from the international capital market. On September 11, 2023, the Government through the Ministry of Finance, successfully issued US$560 million senior, unsecured long seven-year notes at a coupon of 5.95 per cent.
That bond offer was in tandem with T&T’s announcement on September 5, 2023, of the commencement of a cash tender offer to purchase any and all of the outstanding US$550 million aggregate principal amount of its 4.375 per cent notes due 2024.
