Apr 2009 Financial News

'Bonds oversubscribed'

Apr 23, 2009

Government's latest bond issue to raise money for State projects is expected to have been oversubscribed, Finance Minister Karen Nunez-Tesheira said yesterday.

"I expect it would have been more than well subscribed because that has been the experience in the past with every bond that has been floated. It has not only been well subscribed, it has been oversubscribed," she told the Express by phone yesterday.

Government proposed to raise $1 billion, or as much as $1.5 billion, through the bond issue, its first for the year.

Fifteen-year bonds were auctioned with a coupon rate of 7.75 per cent per annum. They were issued to "finance Government's capital investment", an information memorandum on the issue stated last week.

A single-price auction was used and the auction opened on April 7 and closed on Tuesday.

The expected more than $1 billion raised will finance State projects following Government's adjustments to the national budget amid global declines in the price of crude oil and natural gas.

The bonds were also expected to mop up excess liquidity in the financial system.

Nunez-Tesheira said: "I don't know what would be the final result of (the bond issue) but certainly that is consistent with what we had indicated when we looked at making some adjustments in our budget that we have to be looking at ways of raising money for the revenue.

This would be achieved by raising money with the use of the mechanism of the bond, she said.

She did not elaborate on specific Government projects that would be undertaken with the money raised through the bond issue.

"I don't know if we had any specific project in mind, I mean it is within the context of what you're looking at in terms of what your budgetary projects are and what we had indicated before in terms of the deficit financing mechanisms that would be available to the Government," she said.


Source:
Curtis Rampersad
Trinidad Express
Thursday, April 23rd 2009

http://www.trinidadexpress.com/index.pl/article_business?id=161468281