...Group in dark over $2b Govt bond ad
The CLICO Policyholders Group (CPG) said yesterday in a statement that a number of questions need to be answered with respect to an advertisement appearing in all three daily newspapers over the weekend advising the public that a TT$2 billion Government of the Republic of Trinidad and Tobago (GORTT) bond will be issued under the authority of the Development Loans Act Chap. 71:04.
According to the advertisement, the bond is for 15 years with a coupon or interest rate of 5.20 per cent per annum due to mature on September 27, 2027.
The statement issued by CPG chairman Peter Permell pointed out that this is only the second bond issue for the year thus far, as the local bond market has been "relatively subdued due to the dearth of public GORTT bond auctions."
The statement said, "one would recall that the first was a TT339 million National Insurance Property Development Company Limited (Nipdec) bond, offered on August 22, 2012, to finance the implementation of Phase II of the Motor Vehicle Authority of Trinidad and Tobago Project. The bond was for 13 years with a fixed coupon rate of 5.15 per cent due to mature in 2025. The issue was significantly oversubscribed by approximately 6.3 times, with the total bids received totaling to $2.1 billion."
It added, "What is interesting about this TT$2 billion bond being offered, unlike the previous bond and others before it, is that no specific purpose is given for the issue, except that the advertisement states: 'The bond is being issued to settle existing Government liabilities'."
The statement said it was also of interest "that the bond will be issued on September 27, 2012 one working day ahead of the presentation of the 2012-2013 budget on October 1, 2012. It is being issued at a time when the CPG has been making strident representation in the print media for the Government to make good on its promise to pay policyholders dollar for dollar on the last 10 years of their bonds via the establishment of the Clico investment fund, NEL 2."
Finance Minister Howai in a subsequent newspaper article acknowledged the fact that 'there were legal issues with the establishment of NEL 2 into which the Republic Bank shares would be placed'."