Gov­ern­ment is look­ing to raise US$100 mil­lion on the lo­cal cap­i­tal mar­ket, with Re­pub­lic Bank Ltd and First Cit­i­zens Bank Ltd named as the co-lead arrangers, ac­cord­ing to a term sheet for the bond that was seen by Guardian Me­dia Ltd.

The term sheet was be­ing wide­ly cir­cu­lat­ed to high net-worth in­di­vid­u­als, mu­tu­al funds and pen­sion plans yes­ter­day as the funds need to be in the Gov­ern­ment’s ac­count by the mid­dle of Jan­u­ary.

The bond is par­tial­ly amor­tis­ing, mean­ing the se­mi-an­nu­al pay­ments would be a com­bi­na­tion of prin­ci­pal and in­ter­est. The prin­ci­pal on the bond will be made in five equal, se­mi-an­nu­al prin­ci­pal pay­ments of US$10 mil­lion com­menc­ing in Ju­ly 2024. As a re­sult, bond­hold­ers will re­ceive a US$50 mil­lion bul­let pay­ment at ma­tu­ri­ty in Jan­u­ary 2027.

The bond is fixed rate and ma­tures in three years. It pays an in­ter­est rate of 6.65 per cent per year but be­cause the fa­cil­i­ty is par­tial­ly amor­tis­ing, the yield would be 6.25 per cent.

With re­gard to the se­cu­ri­ty for the bond, the term sheet states: “Prin­ci­pal and in­ter­est rep­re­sent­ed by the fa­cil­i­ty will be charged up­on and payable out of the Con­sol­i­dat­ed Fund of the Re­pub­lic of Trinidad and To­ba­go and se­cured on the rev­enues and as­sets of the Re­pub­lic of Trinidad and To­ba­go.”

The pur­pose of the bond is “to re­pay an ex­ist­ing Gov­ern­ment US$100 mil­lion bond that is due to ma­ture on Jan­u­ary 16, 2024.”

But in a news re­lease is­sued on Sep­tem­ber 13, 2023, the Min­istry of Fi­nance in­di­cat­ed that the Gov­ern­ment had suc­cess­ful­ly raised US$560 mil­lion on the in­ter­na­tion­al cap­i­tal mar­ket in or­der to re­fi­nance a US$550 mil­lion bond that is due to ma­ture in Jan­u­ary 2024.

The Min­istry of Fi­nance de­scribed the Sep­tem­ber 2023 bond as a “suc­cess­ful, heav­i­ly over­sub­scribed bond is­sue by the Re­pub­lic of Trinidad and To­ba­go of US$560 mil­lion on the in­ter­na­tion­al cap­i­tal mar­ket.”

In the news re­lease, the Min­istry of Fi­nance said: “On Mon­day Sep­tem­ber 11, 2023, the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go, through the Min­istry of Fi­nance, suc­cess­ful­ly is­sued US$560 mil­lion se­nior un­se­cured long sev­en-year notes at a coupon of 5.950 per cent on the in­ter­na­tion­al cap­i­tal mar­ket. The of­fer was over­sub­scribed by three times the amount re­quired.”

The min­istry said the “pro­ceeds from the is­suance and sale of the notes will be used for re­fi­nanc­ing the Re­pub­lic’s out­stand­ing 4.375 per cent notes due Jan­u­ary 2024.”

The Sep­tem­ber 11, 2023, bond is­sue for US$560 mil­lion “was in tan­dem with the Gov­ern­ment’s an­nounce­ment on Sep­tem­ber 5, 2023, of the com­mence­ment of a cash ten­der of­fer to pur­chase any and all of the out­stand­ing US$550 mil­lion ag­gre­gate prin­ci­pal amount of its 4.375 per cent notes due in Jan­u­ary 2024,” ac­cord­ing to the Min­istry of Fi­nance.

The Sep­tem­ber 2023 news re­lease said the “trans­ac­tion al­so re­alised 41 per cent par­tic­i­pa­tion in the Re­pub­lic’s cash ten­der of­fer, which was an of­fer made to ex­ist­ing bond­hold­ers to re­deem their ex­ist­ing notes due in 2024 ear­ly and ex­change them for cash four months ahead of the ma­tu­ri­ty date in Jan­u­ary 2024.”

The Min­istry of Fi­nance said the ex­cep­tion­al suc­cess of the Sep­tem­ber 2023 bond is­sue un­der­scored the mar­ket’s con­fi­dence in T&Ts cred­it and sus­tain­abil­i­ty pro­file.

“Com­pre­hen­sive prepa­ra­tion, good man­age­ment of the coun­try’s fis­cal ac­counts and rapid but strate­gic ex­e­cu­tion have al­lowed us to man­age re­fi­nanc­ing risk in a way that is pro­tec­tive of our pub­lic fi­nances.” said Fi­nance Min­is­ter Colm Im­bert, in com­ment­ing on the trans­ac­tion.