Government looks to local capital market to raise $100 million
Monday December 19 2011 | 08:56 AM

IN what again will be another test of market sentiments, the Barbados Government is going to the local capital market to raise $100 million from an issue of debentures.

In announcing the issue the Central Bank of Barbados said that the loan is being raised to assist with the financing of the Development Plan.

The issue of the 7 3/8 per cent debentures is coming against the background of recent discussions on long term debt instruments by Governments in the Caribbean, by Wayne Daas of the Caribbean Regional Credit Rating Agency.

In that presentation Daas said that in the Caribbean there is a need for the rating of bonds which are issued by both governments and the private sector. He promised that CARICRIS will be coming up with a Bond pricing service to model bonds in terms of their market risks, credit risks and liquidity risks. 

The Central Bank said that the debentures under this issue will be in denominations of $1 000 or a multiple thereof and will before being issued, be recorded in the Register of Securities at the Central Bank of Barbados.  

Each debenture and the right to receive principal and interest represented thereby will be transferable. Debentures are eligible securities for trading on the Securities Exchange of Barbados.

The interest due to Pensioners 60 years and over residing in Barbados will not be subject to withholding tax. Non-resident holders seeking tax exemption must satisfy the Commissioner of Inland Revenue of their status before exemption is granted. However, for all other persons resident on the island, the interest from the debentures will not be aggregated with other income, but will be taxed separately at a rate not exceeding 12%.

The bank said this loan is secured on the Consolidated Fund and assets of the Government of Barbados. A sinking fund will be established by half-yearly appropriations out of the Consolidated Fund with accumulations of interest to enable the debentures to be redeemed when they fall due.
The debentures will be repayable at par on September 30, 2027.