NASSAU, BAHAMAS – The government’s medium-term debt strategy projects that it will provide nearly 60% of its gross financing requirement of $1.7 billion for the 2022/2023 financial year in Bahamian dollars.
The Ministry of Finance noted that under the 2022/23 annual borrowing plan, approximately 57% of the $1,760.8 million in financing will come from local currency and the remaining $764.7 million (43. 4%) in foreign currency.
The government will, however, continue to monitor domestic market conditions and investor sentiment, in order to take advantage of opportunities to secure a greater proportion of financing from domestic sources.
Any recourse to foreign currency borrowing will take advantage of policy-linked lending facilities from international financial institutions (IFIs) and, to a lesser extent, commercial loans.
The Department of Finance noted that the $1,760.8 million – as incorporated in the June 16 borrowing resolution includes raising funds to fill the budget gap of $564.0 million – and by which the Government’s stock of debt must increase and refinance approximately $1,196.8 million in maturing debt securities and loans.
“A key point to note is that the budgeted budget result excludes the potential sale of the Lucayan Resort properties, at an estimated price of $100 million, which would have a positive impact on the government’s cash position and accordingly reduce the borrowing needs.
“The government will seek to pursue a prudent mix of domestic and foreign currency borrowing that would ensure progress towards the selected optimal debt strategy for fiscal year 2022/23 – fiscal year 2024/25.”
While the government will meet nearly 57% of its gross financing needs in Bahamian dollars, the Ministry of Finance noted that “the government will continue to monitor domestic market conditions and investor sentiment, in order to take advantage of opportunities.” obtain a greater proportion of funding from national sources”.
“As part of the Bahamian dollar financing, approximately $776.1 million is expected to come from issuances of government bonds and treasury bills, with the remaining $220.0 million coming from commercial credit facilities and others.”
“Eventual recourse to foreign currency borrowing will take advantage of policy-related lending facilities from international financial institutions (IFIs) and, to a lesser extent, commercial loans.”