$250m BEC bond yet to launch


Tribune Business Reporter


THE Bahamas Electricity Corporation’s (BEC) $250 million bond issue has still not gone to market, although a Cabinet Minister believes the Government guarantee should ensure it is fully subscribed.

Michael Halkitis, minister of state for finance, said: “They have not gone to market yet. We went to Parliament to get the authorisation for the guarantee, and there is still some preliminary work they have to do before they go to market.

“We expect that with a Government guarantee there should be no problems  in getting it fully subscribed.”

He added: “I have to liaise with BEC and those. I think they want to go as soon as possible, but I would like to see where they are. A lot of it would depend on when they are ready to move.”

The Government unveiled the planned $250 private placement back in January to refinance the troubled Corporation. The US dollar-denominated financing, which will be raised via a process managed by CIBC FirstCaribbean, is intended to replace short-term bank debt with cheaper long-term financing.

The bond, which is set to have a 15-20-year maturity, depending on investor appetite, will refinance and pay out two existing loans held by BEC.

The first, a $211 million syndicated bank loan, was due to mature in October 2012, indicating it must have been extended, while another $35 million loan - required to finance BEC’s fuel purchases from Shell Western - will also be paid out.


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