Maroc - NEWSDAY.CO.TT - A la Une - 26/Jan 04:45

Tancoo: US$1b bond shows investor confidence

Finance Minister Davendranath Tancoo believes the recently secured ten-year unsecured sovereign bond, valued at US$1 billion, with a 6.4 per cent interest rate on the US market, is proof of investor confidence in the country. Announced on January 22, Tancoo said the bond was immediately oversubscribed two and a half times, "underscoring strong and diversified investor demand for the investment in the Republic of TT and, most importantly, confidence in the plans, policies and initiatives of the current Kamla Persad-Bissessar administration." The bond was issued and managed by J.P. Morgan and Bank of America. He said the bond leverages over 140 "unique orders from top accounts." Tancoo said the bond was sought to refinance a 2016 bond acquired under former Finance Minister Colm Imbert for the country's development programme. However, he accused his predecessor of not having any plans for how to repay it and of poorly managing the funds. Tancoo said the notes, governed by the laws of New York, were superior to the ones acquired under Imbert, with more benefits to the country. "We achieved the largest bond transaction in the past ten years for the Republic of TT. We achieved the largest order books in the last five years of US$2.4 billion despite two negative ratings outlooks. "We increased participation in the number of total investors, 144 unique investors in 2026 versus 93 unique investors in 2024 under Colm Imbert. We repositioned TT's credit with a large, diverse and high-quality investor base. "We compressed pricings by 20 basis points from IPTs (initial price thoughts) to launch. We materially extended the external debt maturity profile average life of the Republic from 4.1 year average life to 6.3 year average life. We fully addressed the August 2026 external bond maturity of US$1 billion. The transactions were priced at levels of 54.6 basis points; tighter than the sovereign's original issuance of this US$1 billion transaction issued in 2016." He said the transaction meaningfully enhances the country's funding profile and supports continued engagement with global investors "on increasingly favourable terms." Furthermore, he said the bond was priced at better values compared to other Caribbean countries with close to or better global agency ratings. For instance, he said, the Bahamas, with a fixed rating of BB-, went to market with a ten-year US$1.67 billion bond in June 2025 with a coupon rate of 8.25 per cent. Barbados, he said, with a fixed rating of B+ went to market with a US$500 million bond in 2025 with a coupon rate of 8 per cent. Additionally, he said Dominican Republic's 12-year US$2 billion bond generated a 6.9 per cent coupon. "Given these truths, it is clear that international investors continue to place TT in a higher quality bucket even amid elevated global rates and recent outlook revisions." In October, S&P Global Ratings reaffirmed TT’s credit rating at BBB- but revised its outlook down from stable to negative. In order to meet the financial commitments of the bond, Tancoo said the UNC-led administration intends to close an estimated $10 billion tax gap and revenues earned in the energy sector through arrangements with EOG, ExxonMobil, bpTT, Shell, Perenco and others. Additionally, he said the Gulf States and China have expressed interest in investing in the government's Revitalisation Blueprint, which would see 11 major infrastructural projects undertaken over the next ten years. "We have been putting in place measures for that exact purpose, to meet our financial obligations now and in the future and we expect that those revenue streams, those foreign exchange generation options would be generating sufficient foreign exchange so that when the bond becomes due in fiscal 2026, that the country will be in an appropriate comfortable place to meet its financial obligations to repay the bond." The post Tancoo: US$1b bond shows investor confidence appeared first on Trinidad and Tobago Newsday.