In a statement released Wednesday, the Ministry of Finance announced the award of a long-term financing deal for the government to First Caribbean International Bank (Cayman) Ltd.
The financial arrangement is in respect of government’s 2010/11 fiscal year and is for a total of US$185 million in borrowing through 30 June.
The United Kingdom has not allowed the Cayman Islands to make any new borrowings for the next two fiscal years, those being the 2011/12 financial year and 2012/13 year.
The interest rate for the 15-year commercial bank loan will be established at the time the funds are withdrawn by government and the rate will be fixed for the duration of the loan.
Premier McKeeva Bush, who is also minister of finance, said the Central Tenders Committee fully reviewed loan options.
“I have been informed of the outcome of the tendering process and from the information presented to me after the decision was confirmed by the Central Tenders Committee, I am satisfied that the Government went through this process,” Premier Bush said. “Cost minimisation is paramount to my Government and me.”
Mr. Bush said the bids submitted for the loan were “extremely competitive”.
The long-term financing loans come after government received two temporary loans that were arranged through a New York-based firm earlier in the year.
One loan of US$92.5 million was arranged via Cohen &
Company Capital Markets LLC with the funding provided jointly through two banks
– one in the Cayman Islands and another which is Caribbean-based.
The second loan, also arranged through Cohen, was for US$36
million and was provided by a European bank.
Government paid back the smaller loan through “cash and
revenue sources”, according to a statement received from the Ministry of Finance
in response to questions.
The US$92.5 million loan, due to be repaid this month, will be repaid out of the proceeds of the newly awarded loan, ministry officials said.
“These temporary loans were needed regardless of which
entity was chosen to do a bond issue,” according to a Ministry of Finance statement issued in February. “In
fact, the bid documentation…that was issued made it clear that a
‘bridge/temporary loan’ was required for all bidders.”
See the full story in upcoming editions of the Caymanian Compass….