Government pays off $10 million debt early

MLA Winston Connolly would like to see solar panels installed on the roof of the Government Administration Building. - PHOTO: CHRIS COURT

The Cayman Islands government this year will pay off up to $10 million in debt early, according to Finance Minister Marco Archer.

The money will go toward retiring the debts of several statutory authorities and government companies which are managed outside of central government.

According to Mr. Archer, the largest amount – a bit more than $6 million – will go to the Cayman Islands Development Bank. The repayment of debt for the development bank includes amounts borrowed for loans guaranteed by the government that were not repaid by those who received them.

Amounts not exceeding $1 million will go to Cayman Airways; a $1.25 million payment will go to the Health Services Authority; and up to $1.41 million will be given to the Cayman Turtle Centre.

“The government will write to the relevant [statutory authorities and government companies] to make clear that the additional payments should be applied to that [debt] and no other purpose,” Mr. Archer said.

Minister Archer announced early this year the government’s intention to repay some of government’s more than $600 million in outstanding loans if it could obtain the agreement of the U.K. Foreign and Commonwealth Office to do so under current financial management agreements.

Debt held by the central government – which accounts for about $500 million of the total debt the Cayman Islands government maintains – could not be paid off early without penalties under the existing loan agreements, Mr. Archer said. This was the reason the government chose to pay off the authorities’ debts instead, he said.

Up to $10 million in payments should serve to lower Cayman’s overall debt costs in future years, if no further long-term borrowing is undertaken by government, Minister Archer said.

Minister Archer’s goals for paying off government debt include the potential for Cayman to pay off a US$312 million bullet loan, due in November 2019, all at once if government can manage it.

The government has amassed more than $400 million in operating surpluses over the past four years and has lowered the central government debt balance by about $75 million.

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