FINANCE MINISTER Dr. Omar Davies is poised to return to the international capital market in a few days in a bid to raise US$200 million, it emerged yesterday.
A preliminary offer memorandum obtained by
The Gleaner showed that US investment house Bear Sterns will be the lead manager on the proposed US$200 million bond issue, which is expected to have a seven-year maturity. The deal has not been priced but US sources said that it could yield around 13 per cent for investors buying the bonds.
Local fund managers suggested that the deal could emerge as early as Friday. They were surpassed at the proposed 13 per cent pricing of the new bond. "This bond could be as much as 1.75 per cent more than the US$50 million issue recently by Citibank for the Government in the domestic market. It's steep and it doesn't augur well for the supposed reduction in domestic interest rates," said one leading fund manager who asked not to be named.
In July the Government had looked at raising US$250 million but a subsequent issue from Argentina saw support for that bond issue ebb away.
The Finance Minister said in April during his Budget presentation that he would raise US$400 million in the international capital market to help finance the $167 billion spending programme he outlined.
The expected 13 per cent yield led to a sell-off in existing bonds issued previously by the Government, as some investors moved to position themselves for the latest issue
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