Bid process questioned
The Cayman Islands government has selected a successful bidder
for US$185 million in long-term financing needed to support public projects and
government operations over the next year.
The bid winner, Cohen and
Company Securities LLC – headquartered in New York – is in the process of finalising its
proposal, according to a statement released by Premier McKeeva Bush on Monday
“The terms of the
long-term financing are still being finalised as this depends on actual market
rates of the day,” Mr. Bush’s statement read. “However, the proposal that was
accepted was extremely competitive.”
Mr. Bush said bridge
financing ahead of the bond arrangement process had already been secured.
“The solution from Cohen
and Company enables the government to benefit from the current very low interest
rate environment while limiting our maximum interest rate over the entire life
(of the loan),” Mr. Bush said.
Lower interest rates are
preferable because they require government to pay back less money over time on
the amount it has borrowed.
However, opposition party
lawmakers were already expressing concern about how the bid process for this
borrowing had been handled by the ruling government.
George Town MLA Alden
McLaughlin said Monday that he understood the initial bid winner for the US$185
million in financing selected by Cayman’s Central Tenders Committee was not
chosen by Cabinet.
Mr. McLaughlin said the
committee had initially recommended the bid be awarded to a joint venture
submitted by two locally operating banks.
“I would like to express
my grave concern that the Central Tenders Committee process wasn’t followed,”
Mr. McLaughlin said.
The Caymanian Compass
contacted officials with the tenders committee for comment on the matter. They
confirmed that the initial bid winner selected by the committee was not the bid
government ended up choosing.
Mr. Bush’s statement said
the Cohen and Company bid was “the lowest rate among all of the fixed interest
rate solutions presented to the government from firms who could deliver the
funding to the government on time”.
Please see much more on this story on Tuesday’s Caymanian Compass…