Less than two months since the US$600 million international capital market transaction, and with the market responding positively to the prospect of a reopening Bahamian economy, the Government was able to take advantage of a significant rally witnessed in the 2032 Notes, to successfully launch a US$225 million reopening of these Notes.

The transaction was well received by the market. The orderbook was multiple times oversubscribed with more than 75 global investors participating in the final transaction. Underscoring the markets’ strong and growing interest in The Bahamas’ credit, the reopening exercise priced at a yield of 8.00 percent—125 basis points less than the 9.25 percent obtained in the October 2020 transaction. The Notes priced above par, at 106.783%, thereby generating gross proceeds of approximately $240.3 million for the Government (excluding accrued and unpaid interest), compared with the $225 million value of the Notes.

The other terms of the Notes remain the same as the October transaction. They carry an 11-year weighted average life with a coupon (interest rate) of 8.95 percent per annum, payable semi-annually in arrears,and with principal amortization payable in three equal annual installments, commencing on October 15, 2030 and a final maturity date of October 15, 2032. 

The US$225 million in proceeds from the reopening will be used to finance the Government’s general 2020/2021 budgetary needs, and falls within the $1.334 billion in approved financing for thefiscal year.

Consistent with its debt management strategy, the Government intends to establish a sinking fund to assist in managing the future repayment obligations arising from this debt issuance.

This transaction represents the Government’s second transaction in the international debt capital markets for the 2020/21 fiscal year, both of which were led by Credit Suisse Securities (USA) Inc.