In his speech at the launch of the Trinidad and To­ba­go Mort­gage Bank (TTMB) on March 20, Min­is­ter of Fi­nance, Colm Im­bert, de­scribed the coun­try’s newest fi­nan­cial in­sti­tu­tion as rep­re­sent­ing “a sig­nif­i­cant mile­stone in the Gov­ern­ment’s thrust to of­fer to de­serv­ing and el­i­gi­ble cit­i­zens of T&T mort­gage in­stru­ments which could pro­pel them from be­ing renters at the mer­cy of land­lords to proud own­ers of their cas­tles.”

Re­fer­ring to the theme of launch, which was An­ti-Grav­i­ty, Mr Im­bert said: “We use this word in its fig­u­ra­tive sense to­day, as this merg­er of the Trinidad and To­ba­go

Mort­gage Fi­nance Com­pa­ny (TTMF) and the Home Mort­gage Bank (HMB) is des­tined to take T&T to high­er heights, de­fy­ing in a re­al sense the grav­i­ta­tion­al pull of those who wish to hold us back as a coun­try.

“In oth­er words, the TTMB will lift our cit­i­zens up and take them up­wards to home own­er­ship, thus de­fy­ing grav­i­ty....

“This im­por­tant merg­er, un­der­tak­en by a se­ri­ous Gov­ern­ment, will al­low cit­i­zens to use this fa­cil­i­ty to find vi­able in­vest­ments, mort­gage so­lu­tions, and fi­nanc­ing for com­mer­cial and res­i­den­tial de­vel­op­ment, en­hanc­ing cit­i­zens’ qual­i­ty of life. In this in­stance, one plus one is not the sum of its parts, but a very pow­er­ful fi­nan­cial in­sti­tu­tion des­tined to be­come a ma­jor play­er in the mort­gage mar­ket.”

Mr Im­bert al­so made clear that the merg­er of the TTMF and the HMB will give the TTMB ac­cess to $2 bil­lion in low-cost funds, which will re­duce the cost of bor­row­ing for TTMB from 6 per cent, the mar­ket rate, to 3 per cent, “thus al­low­ing TTMB to sig­nif­i­cant­ly re­duce its ex­pens­es and ul­ti­mate­ly re­duce the cost of mort­gage lend­ing for low and mid­dle-in­come earn­ers.”

Let me make clear that I am ful­ly in sup­port of the idea of TTMB as I be­lieve that any in­sti­tu­tion that am­pli­fies com­pe­ti­tion in the mort­gage mar­ket can on­ly ben­e­fit the lo­cal econ­o­my and the peo­ple who, as Mr Im­bert said, want to be pro­pelled “from be­ing renters at the mer­cy of land­lords to proud own­ers of their cas­tles.”

But ques­tions arise:

1) Have the Min­istry of Fi­nance, the Na­tion­al In­sur­ance Board, which has a ma­jor­i­ty stake in the TTMB, the TTMF or the HMB done a sur­vey or a fea­si­bil­i­ty study to de­ter­mine how many po­ten­tial cus­tomers would be at­tract­ed to the new com­pa­ny’s low cost mort­gages?

What does the TTMB de­fine as its mar­ket?

In an in­ter­view with Guardian Me­dia at the Hous­ing De­vel­op­ment Cor­po­ra­tion’s (HDC) first key dis­tri­b­u­tion cer­e­mo­ny at River­side East, Ste Madeleine, in March 2023, HDC chair­man Noel Gar­cia said the ar­rears of delin­quent ten­ants of the Cor­po­ra­tion had climbed to $157 mil­lion.

Gar­cia said the HDC has ap­prox­i­mate­ly 10,000 ten­ants pay­ing rent, and 55 per cent were in ar­rears, in­clud­ing some whose fees are as low as $100 per month. Some with li­cence-to-own con­tracts are al­so in ar­rears.

In March 2023, Gar­cia said the HDC would now as­sem­ble a spe­cial task force to deal with delin­quent ten­ants. The task force will em­bark on a cam­paign be­gin­ning next month to get those ten­ants to pay their ar­rears. It start­ed with a vir­tu­al meet­ing with Oa­sis Greens res­i­dents, where some renters and rent-to-own ten­ants owe $3.4 mil­lion, he said.

The HDC chair­man said the days of peo­ple get­ting HDC hous­es and reneg­ing on their oblig­a­tion to pay are over.

2) So if 55 per cent of the HDC’s rent­ing ten­ants were in ar­rears in March 2023, does the TTMB ex­pect these delin­quent ten­ants to be will­ing to af­ford a mort­gage from the new fi­nan­cial in­sti­tu­tion?

3) Where are TTMB’s cus­tomers go­ing to come from, es­pe­cial­ly as T&T’s com­mer­cial banks have been reach­ing out to of­fer mort­gages to pub­lic ser­vants and those in the State sec­tor?

Go­ing pub­lic

In the 2022 bud­get, which was de­liv­ered on Oc­to­ber 4, 2021, Mr Im­bert said: “...We have agreed to the merg­er of the Trinidad and To­ba­go Mort­gage Fi­nance Com­pa­ny

Lim­it­ed and the Home Mort­gage Bank, cre­at­ing in the process the Trinidad and To­ba­go Mort­gage Bank.

“We in­tend to make an Ini­tial Pub­lic Of­fer (IPO) of the Gov­ern­ment shares in the new en­ti­ty to fur­ther en­cour­age pub­lic par­tic­i­pa­tion in the cap­i­tal mar­ket.

Bar­ring un­fore­seen cir­cum­stances, the align­ment of the op­er­a­tions of both en­ti­ties is ex­pect­ed to be com­plet­ed in the first half of fis­cal 2022.”

So, two-and-ahalf years ago, Mr Im­bert said it was the Gov­ern­ment’s in­ten­tion to is­sue shares in the TTMB “to fur­ther en­cour­age pub­lic par­tic­i­pa­tion in the cap­i­tal mar­ket.”

Un­doubt­ed­ly, the Min­istry of Fi­nance un­der Mr Im­bert has a good track record in pub­lic of­fer­ings, both ini­tial and ad­di­tion­al.

This year’s as­set-back, five-year bond, called NIF2, which was launched on Jan­u­ary 22, 2024, was over­sub­scribed by 267 per cent. That bond, which pays an in­ter­est rate of 4.50 per cent, at­tract­ed 1,110 new ac­counts, with over 91 per cent of these ac­counts be­long­ing to re­tail in­vestors.

The 2022 First Cit­i­zens Ad­di­tion­al Pub­lic Of­fer­ing was over­sub­scribed by 55 per cent as it at­tract­ed ap­pli­ca­tions for a to­tal of 16,865,007 or­di­nary shares with a val­ue of $843,250,350. In the APO, 10,869,565 shares were avail­able at a price of $50 per share, which was meant to at­tract gross pro­ceeds of $543.47 mil­lion.

In­di­vid­u­als ap­plied for 5,364,614 shares in the APO, which was 49.35 per cent of the 10,869,565 First Cit­i­zens shares that were of­fered for sale.

If the Min­istry of Fi­nance has had such suc­cess with pub­lic of­fer­ings, why would the Min­is­ter of Fi­nance not have pro­vid­ed an up­date of his an­nounced in­ten­tion to is­sue an IPO of TTMB shares?

Is that still on the cards or has the in­ten­tion been scrapped?

Why the de­lay?

In the 2022 bud­get speech, Mr Im­bert said “the align­ment of the op­er­a­tions of both en­ti­ties is ex­pect­ed to be com­plet­ed in the first half of fis­cal 2022,” which would have been by March 2022.

In the 2023 bud­get, de­liv­ered on Sep­tem­ber 26, 2022, the min­is­ter said: “Madam Speak­er, we are far ad­vanced on com­plet­ing the tech­ni­cal work for the es­tab­lish­ment of the

Trinidad and To­ba­go Mort­gage Bank. The pro­to­cols and le­gal re­quire­ments for merg­ing the op­er­a­tions of the Trinidad and To­ba­go Mort­gage Fi­nance Com­pa­ny and the Home Mort­gage Bank have been fi­nalised by the boards of the Na­tion­al In­sur­ance Board, the ma­jor­i­ty own­er of the two in­sti­tu­tions be­ing merged.

“We en­vis­age by ear­ly 2023, the full op­er­a­tional­i­sa­tion of the Trinidad and To­ba­go Mort­gage Bank, which is ex­pect­ed to be a much more ef­fi­cient and stream­lined or­gan­i­sa­tion, with im­proved fi­nan­cial strength, bet­ter equipped to as­sist the de­liv­ery of af­ford­able hous­es by the Hous­ing De­vel­op­ment Cor­po­ra­tion.”

What caused the two-year de­lay in the launch of TTMB?