The Ministry of Finance said yesterday that the Government's US$1 billion 10-year senior unsecured sovereign bond attracted demand for roughly 2.5 times the final offer size.
The oversubscription came despite the country carrying negative outlooks from both Standard & Poor’s and Moody’s, a reality that framed the transaction as a credibility test rather than a routine refinancing exercise.
The bond, which was jointly arranged by JP Morgan and Bank of America, carries a 6.50 per cent coupon and matures on January 28, 2036. The bond will pay investors twice a year on July 28 and January 26.
Proceeds will be used primarily to retire the 4.5 per cent US dollar notes due in 2026, with the balance supporting general budgetary needs. The structure materially extends the Republic’s external debt maturity profile, increasing the average life from 4.1 years to 6.3 years and fully addressing the looming US$1 billion maturity due in August 2026.
For Tancoo, the transaction was as much about signalling discipline as raising capital.
Commenting on the transaction, Minister of Finance, The Honourable Davendranath Tancoo said, “The successful issuance represents a clear validation of the sovereign’s credit fundamentals and new disciplined policy framework.”
