Barbados Government and External Creditors Announce Agreement

The BU intelligentsia has been following the external debt restructure talks with a keen interest. A press release issued late last week confirmed that a deal was reached by the Government of Barbados and the Barbados External Creditor Committee. A good news story.

Unfortunately the press release does not list the finer details of the agreement. We hope the final agreement is completed without event so that the country can settle down to the enormous task ahead.

Here is the press release.


502 comments

  • Is it possible for any of you financial gurus to clarify all these financial policies and creditor agreements in terms of this dreaded word that Walter (THB) has thrown out there?

    DEVALUATION!

    Is there a link and if so, how so?

    I would ask Walter THB but he may not respond to me, though I dont know why.

    Like

  • John A
    October 22, 2019 1:02 PM

    “The next chapter is the effect on things like the NIS etc. These issues and the Oppenheimer portfolio are too important to all of us when it comes to the future of the NIS to try and sweep under the rug.

    Hal Austin
    October 22, 2019 1:30 PM

    “In July 2010, in my then column in the Nation, I warned that Barbados was running a huge risk with the NIS and suggested that the triennial actuarial reports were not enough of a risk analysis..”

    Dullard
    October 22, 2019 1:03 PM

    “And to think that before all this the NIS was practically insolvent.
    What is the financial state now?
    It will be a grim time for future pensioners.”

    All,
    As a pension actuary, I am burdened with a sense of responsibility to the public that others are not saddled with.

    To all Barbadians, between ages 60-67, I urge you to continue to work and contribute to the NIS if you are able to do so. Rushing out of fear and concern to apply for and start receiving an early NIS pension will put the NIS under more stress, and will create more problems for all of us.

    Civil servants who walk around puffing up their chests and boasting “I have in my 33 1/3”, please be warned that the 33 1/3 years you have put in do not create cash dollars to pay your pensions every month. The payment of your pensions depends and relies on government’s cash flow position.

    No sensible Barbadian should want to see the collapse of the NIS. Once the NIS collapses, it cannot be restarted. Every intelligent Barbadian must hope that government’s financial position shows steady and consistent improvement as time goes by so that our retired civil servants can live out their retirement years away from the clutches and ravages of abject poverty.

    Enough said.

    Like

  • @ Walter
    @John A
    @Vincent

    Plse forgive me, but have I missed a trick? Has the prime minister addressed the nation on the agreement in principle? If so, I missed it; if not, why then has she gone off to Puerto Rico delivering a so-called keynote address when the nation is in such serious economic trouble. The woman is amazing.
    As I have said before, she is mesmerised by applause, by the deference of her fans, by hearing her own voice, by believing her own PR.
    Policy-making is more difficult, it means playing with the figures, thinking through ideas; I get the impression, and I maybe wrong, that she suffers from ADHD, she must be at the centre of events.
    In the meantime, the nation suffers.

    Like

  • @ Walter
    @Hal
    @ Vincent.

    Guys do any of you know as of last month end if there is any NIS site we can go on and get an asset report with breakdown on the Oppenheimer portfolio?

    I would bet money that their portfolio was encouraged by Sinkler to include a sizeable amount of the said paper caught up in the restructuring.

    Walter do have a field roughly for what we are talking here dollar wise?

    Like

  • Feel not field sorry

    Like

  • Not qualified so keeping out of the discussion but Vincent’s comment caught my attention and I ask
    ” worse than BERT in what way” and if you do not have the requisite information
    How then can you draw a conclusion

    Like

  • @VC
    “There has never been a local nor international market for GoB paper/bonds. They were traded privately when emergencies for liquidity arose. And these occasions were very few. The value was simply discounted by an interest factor plus broker fees.”
    “Of course going forward we will see the real impact or absence thereof of the Strategic Default. The latter may or may not be a game changer.”

    In settling an estate back in late 2011, which I would qualify as an “emergency for liquidity”, I [executor(s)] were tasked with liquidating an amount of GoB paper/bonds. I only wish the value was as you stated. Ever tried finding a buyer? NIS, Banks, CBB, large corporations, wealthy persons, brokers etc etc All I will say, is the discount finally offered (2013) was well in excess of “discounted by an interest factor plus broker fees” and as such, am unsure how one can ever gauge the true effect of the SD. To assume the “market”, however small it may be, were not factoring in elevated risk is not empirically accurate.

    Like

  • Hal
    You come across as very hateful or jealous of Mia Mottley. I am sure the lady is addressing the nation Saturday on the foreign debt restructure and more. You must google before you comment on current affairs.

    Like

  • @JohnA
    https://www.nis.gov.bb/investments/2018-2/
    if you go to 2017, you will note 2018 are far less detailed
    The 2018 were recently (last 6 weeks) added

    Like

  • Vincent Codrington

    @ NO at 4:01 PM

    It saddens me to hear of your experience in off loading GOB debentures /treasury notes in 2011 -2013. I personally would have purchased them without the 20/20 hind sight. Up until then GOB securities were low-risk investments.
    Your broker obviously was inexperienced.

    Like

  • @ Hal
    Always remember that ” a nod or a blink is the same thing to a blind mule.“
    Your position on a failed state becomes more ominous by the minute.
    You, John A and Walter , with your contributions on this matter are in my opinion providing a highly needed and respected public service.
    You have chosen to kick the dry shit and it now smells worse than when it was fresh. The stench is now exposed and the smells are enveloping myths and hocus pocus economics.
    To this day the apologists believe there is a magic wand. They were told up front that this is an fifteen year grind and they will see the real results in 2033. Yet in their pathetic ignorance they are already declaring victory . For them the victory is o’er and the battle is won.
    The decadent Duopoly has always fooled them and promised them heaven and earth and all they ever get are lay offs and price increases .
    Citizens like you are hard to find in this brainwashed political desert.

    Liked by 1 person

  • @ Northern

    Thanks for the website info will take a read .

    Like

  • Vincent Codrington

    @ Charles Skeete.

    You should know me better than most BU Household members. I do not jump to conclusions. Hence the need to get all the relevant information. BERT was particularly deficient in providing the information on which disruptive economic decisions were made.

    The information in the Debt Restructuring communique is inadequate and prevents meaningful analyses and commentary from being made by those who guard their professional reputations jealously.

    Like

  • @ William

    Thanks. A good discussion even if the key players are remaining silent. Where is the minister of finance? Where is Professor Persaud? Where is the DLP economics spokesman? Has public discourse come to a halt?

    @ Enuff

    You come across as very hateful or jealous of Mia Mottley. I am sure the lady is addressing the nation Saturday …

    Don’t be silly. Do you know what hate means? As to addressing the nation on Saturday, I think you should stop Googlng. This is an urgent priority, the nation is in the last chance saloon, is this not a priority, or eight days after the event is good enough? Is this what you say to the all-whit meetings which you chair?

    Like

  • Vincent Codrington

    The fundamental problem for some members in the BU household is that we all do not come with open minds ready and willing to debate issues . Far too many come with agenda. I will not be able to please all.

    Like

  • @ William.

    Thanks for the kind words they are appreciated. Better be careful you don’t get accused of associating with the enemy! Lol

    Liked by 1 person

  • And to delay all this money into the next elections to vote her back so she can finish paying,? Vote them all pout all the money we need is held by these same crooks in Offshore accounts, those are the accounts that need holding and taking, not the People all the crooks in Office, start with Mia family then Richard, Owen, COW, Sandra, and many other crooks lawyers, holding stolen money VAT and other taxes, unpaid!

    Like

  • @ John A

    I have never been afraid of little boys wearing long pants.

    Like

  • A reminder to everyone that others are reading, it is useful to avoid language that suggest it is a close discussion between a few like minded commenters. Who the cap fit may wear it.

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  • Hal Austin
    October 22, 2019 5:19 PM

    ” A good discussion even if the key players are remaining silent. Where is the minister of finance? Where is Professor Persaud? Where is the DLP economics spokesman? Has public discourse come to a halt?”

    Hal Austin,
    Let us give credit where credit is due.

    We are indeed fortunate to have the contributions of Piece uh de cock, who is representing the PdP.

    LOL

    Murdah! Oh shirt!
    Bush Tea resurrected.

    Like

  • Murdah! Oh shirt!
    Bush Tea resurrected

    Best sound bite of the day
    Oh sh.iit

    Liked by 1 person

  • @ David.

    I would like to say that this by far was one of the most important topics you have posted for a while. The consquences of the foreign debt restructuring must be discussed in a manner all understand. It must be free of yardfowlism and based solely on facts and data. The effect it will have on the NIS for example, we must further explore in the days to come along with many other related issues such as the urgent need to increase our FX earning capacity.

    I was also very impressed at how the bloggers today for the most part, stayed away from the Bs did this and the Ds did that. Hopefully we can have more discussions of this type going forward, where issues can be ventilated based on facts and free of party loyalties.

    It was indeed a pleasure chatting today with all of wunna! 😊

    Liked by 1 person

  • Why does Mia have to be at every cock fight
    Can she see or understand that the country needs her at home
    She is becoming like an absentee parent who left the children at home to be raised by the TV
    Mia seems not to understand her role as PM is to be on call at a time when the people are looking for solutions
    I understand her travel bill now exceeds ten thousand dollars enough money to feed five or six squatters families
    Mia fuh God sake stay out of other people yard
    Home drumb beat first

    Like

  • @John A

    As commented earlier let us wait for her review on the matter promised soon.

    Like

  • John A

    @ John A
    Kool aid will never match a well made glass of mauby or good old fashioned lemonade and don’t even mention a nice cool drink of swank. No wonder then that the cool aid drinkers disappeared. Once quality turns up cool aid disappears.

    Liked by 1 person

  • @ William.

    You too bad! Lol

    Well let us now await what the PM has to say on it in her address. I believe she will more speak to the need for doing it though, than go deep into the numbers, which to be fair to her she has every right to focus on. She can leave the numbers to those in the ministry of finance to come and layout if they feel like so doing afterwards.

    Like

  • A stable country revolts
    Enough is Enough

    SANTIAGO – Thousands of Chileans poured into Santiago’s central squares Monday to protest high living costs after a weekend of looting, arson and clashes with security forces killed 11 people and prompted President Sebastian Pinera to declare the country “at war” with vandals.

    Buses and metro networks were partially restored for people to return to work but many opted instead to join the biggest demonstrations in years in what is normally one of Latin America’s most stable countries.

    The crisis was sparked by protests over a hike in public transport fares but reflects simmering anger over intense economic inequality in Chile, as well as costly health, education and pension systems seen by many as inadequate.

    Banging drums and pans, blowing whistles and many waving signs calling for Pinera’s ouster, the largely youthful and peaceful crowd filled Santiago’s Plaza Italia and overflowed into surrounding streets, watched from the sidelines by soldiers and police and hovered over by helicopters.

    Like

  • @ John A

    In all fairness to the PM she is doing what PMs do. Prime Ministers look at policy and politics. That is a given.
    You recall when Stuart and Company were being criticized, the cool aid drinkers on that side were very arrogant and impatient with everybody.
    It’s very pathetic that nowadays you can’t even attempt to question Mottley and Company without being branded an enemy of the state or non Barbadian.
    The long lasting effects of the consumption of cool aid.
    Drink Swank, drink mauby , drink ginger beer . Leave the damn cool aid alone people.

    Like

  • @ Walter (tHB)

    There are some topics that are deathly serious and which I understand that the Stoopid Cartoons ARE NOT APPROPRIATE

    Even as I address you in this specific arena, I have refrained from expanding the THB acronym because what you are doing here IS OF SERVICE TO A COUNTRY WHICH I LOVE.

    your problem is that EVEN WHILE YOU ARE CONTRIBUTING TO THIS TOPIC OF NATIONAL IMPORTANCE you still got de ole man in your vindictive memories because you have associated me, AND RIGHTFULLY SO, with the destruction of your political career.

    You are bitter AND I UNDERSTAND WHY, but, IF YOU ARE A TRUE PATRIOT, you will appreciate that your aspirations had to die so that the Third Party Movement, of which the PDP is the most active, MUST BE BORN!

    HAD YOU LISTENED to de ole man, you would have shifted from Fumbles Incompetents long ago.

    But you are as stubborn now as you were26 years ago.

    Keep up the good actuarial advice to the nation

    Like

  • IMF Staff Mission Concludes Visit to Chile
    June 19, 2019

    An International Monetary Fund (IMF) staff team led by Mr. Luca Antonio Ricci visited Santiago during June 5-12, 2019 to discuss recent economic and policy developments. The IMF mission met with government officials, private sector representatives and academics during its stay. At the conclusion of the visit, Mr. Ricci issued the following statement:

    “Economic activity has decelerated, partly owing to a temporary weather-related decline in mining.

    Liked by 1 person

  • Vincent Codrington

    @ Mariposa at8 ?44 PM

    If that report is true then we have a new/old source for “decelerated economic activity.” It reminds one of the theory of sun spots reducing Agricultural output in the 18th cebtury.There is certainly “nothing new under the sun”.

    Like

  • @Vincent

    Exogenous activity is what it is, a small open economy will have to negotiate the challenges. It is what it is.

    Like

  • @ Dullard

    I like you bad, bad!

    In distilling this matter of valuation of the junk sovereign bonds heheheheh You said and I quote

    “…Then I would filter on the characteristics of the issuing entity to see how similar iit is to Bim eg size of popn, financial structure, ability to raise taxes etc. I’d select those. Take the median. This would be my starting point.

    Then tack on various risk premia especially the Persaud premium to account for the reverse midas touch….”

    De ole man heah pissing me pants

    ” especially the Persaud Premium to account for THE REVERSE MIDAS TOUCH…”

    Man, you see gurus like you and The Sage Miller?

    De two uh wunna is Wordsmiths Extraordinaire!

    Wunna does give Language Classes?

    I want to come!

    De ole man, bereft as I am of wunna oratory skills, would have said something like, ” dat man is a RH blight”

    Lesser mortals here have called him a “snake oil salesman” and similar deprecatory remarks (I get dat big word “deprecatory” from my friend Walter and cause I ent too bright, I using it every chance i get)

    Though i also am learning from Mr Vincent Codrington “and will be guided accordingly”

    Just goes to show you how class CANNOT BE TRANSFERED BY ASSOCIATION, de ole man like an ole dog dat too old to learn new tricks!

    The Reverse Midas Touch! Heheheheh

    Liked by 1 person

  • Present govt promised that when NSRL was removed that prices will go down instead every RH thing has gone up
    Overheard a consumer saying she paid 30.00dollars for a gallon of orange juice and we have measly mout poochlickers applauding govt as doing a good job after all the promises made to the people and none delivered
    That new agreement is another piece of the puzzle that gonna stick a hot metal pipe into the people a.rres by way of taxes
    Wunna RH people who supporting this unmitigated destruction of poor people need RH drowning fuh trute

    Liked by 1 person

  • Again, thanks to many of the contributors for sharing their wisdom.

    It is sad when a one-trick and one verse pony wanders onto the track and tries to put all the ideas of a person into a single column.
    Sadly the columns are label B and D.

    It is a form of intimidation and a warning. Contributors, I wish you well.

    Have a great day, Barbados.

    Liked by 1 person

  • @ TheOGazerts

    We often accuse the political class of failing leadership. However some of us when given the opportunity to lead tend to behave just like the political class. The reason that BU has found itself in this position of Bees and Dees , is a direct result of the powers that be refusing to see the big picture when it comes to public discourse.
    There must be standards of engagement but I have read some contributions on BU that should have been censored because there is nothing in proper discourse that suggests one has to go into the gutter to win a point.
    Alarmingly , The same contributors whose behavior ,was to put it mildly unfit for publication ,found the highest reverence and proper discourse, for others whom they consider to be their intellectual equals. I therefore realized when all the fancy anti-society talk was over, they still wanted to be considered intellectual elites and therefore reserved the proper manners they pretended that they did not have for a select few.
    You will note that a promise to revamp the organ never materialized because there is a danger in exposing blatant ignorance and hypocrisy when there is structure.
    Fortunately, there are a few contributors who have given great service to BU and were able to fly above hypocrisy , pretended intellectual elitism and basic bad manners.

    Like

  • Vincent Codrington

    @ David at 12:36 AM

    You may have missed it; but most bloggers are concerned about the endogenous responses to those external factors. The our responses are variables over which we have control.

    Like

  • @ William.

    I read once that the English language has more than an adequate collection of words to discuss any topic. Those that go into the gutter show us 2 things. One they are basically illiterate and two they know that and are insecure.

    Let us therefore always remember that and avoid being dragged Into the gutter by such persons at all cost.

    Like

  • John A
    October 22, 2019 3:10 PM

    Guys do any of you know as of last month end if there is any NIS site we can go on and get an asset report with breakdown on the Oppenheimer portfolio?
    I would bet money that their portfolio was encouraged by Sinkler to include a sizeable amount of the said paper caught up in the restructuring.
    Walter do have a (feel) roughly for what we are talking here dollar wise?

    John A,
    No.
    Maybe I need to have a closer and much more meaningful relationship with our NIS.

    Like

  • Me thinks everything is BECOMING UNGLUED…lol

    Liked by 1 person

  • @ Walter.

    I agree with you for sure, or next thing they may move the retirement age to 80 and i might get my first pension cheque and death benefit cheque in the same envelope! Lol

    Liked by 1 person

  • @ David.

    Sometime we need to look next at what the 2 debt restructuring mean to us in term of our state assets and the NIS.

    In other words what in real terms is our NIS portfolio really worth when one takes into account the discounted paper and overpriced buildings it owns, like the Grotto that cost as much per square foot to build as some west coast homes.

    After all it is us that will have to refinance the fund so we could as well start bracing for it and take our head out the sand from now!

    Liked by 1 person

  • Vincent Codrington

    @ John A at 11:05 AM

    You may brace yourself as tightly as possible . When one cannot pay;one cannot pay. So we need to stop the rot at the earliest opportunity. That is now.
    That is why we need to stop playing these( bad word)games and lay out the facts so that we who think we can help may do so.

    Like

  • @ Vincent.

    My friend I could not agree with you more. The problem is the data we need to get at is better protected than Colonel Sanders Chicken Recipe!

    Liked by 1 person

  • @John A

    We know the NIS is up a creek, we do not have to wait for the overdue actuarial report to be made public. All the analysis will not change the state, we are capable of extrapolating.

    @William

    Will say this: BU is a reflection of our society. In order to heal thyself the illness and warts must be exposed.

    Like

  • @JohnA
    the NIS has been discussed ad nauseam on BU. While you now add the impact of recent restructurings, an annual report has not been delivered since circa 2006. Not even a report without the financials. The same NIS webpage I directed you to, once had a section for Annual Reports, which disappeared in a website upgrade a few years back. Apart from triannual Actuarial Audits, which have been tardy, and a pet peeve of WB, since successive Boards have opted for external audit firms.
    We know from these audits, the NIS was a prime source of ‘home grown financing’. The Blogmaster had several exchanges on other social media with the former Chair, who claimed the Board was tackling the reporting challenges. The new administration of the GoB in May 2018, appointed a new Board, which interestingly bore a strong resemblance to the former Board. That message is usually they wish no change, or whatever knowledge exists, it is best to ‘keep a lid on it’.
    When one appreciates that a little company like GEL, with operations in 35+ countries, in at least 7 currencies, and they can produce financial reports on a timely quarterly and annual basis, one realizes it is not a lack of accounting talent available on the island, causing the vacuum in reporting.

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  • How could any responsible government take up $27 million dollars and lend one of the richest men on the island while our national stadium is in ruins?

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  • Very good discussion so far gentlemen.

    I have learnt a lot. Lorenzo and Enuff showed their heads and ran away. If you(Barbados) have to repay $64 million US next year in loans and interest, Mia will need a very, very large gathering. If the same amount or half that is due in 2021, she will need a gathering every year until 2033.

    Thanks for the enlightenment.

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  • @ William

    Was the loan to this so-called ‘rich’ man collateralised? Who negotiated on behalf of the NIS? Are they public servants? If so, are they still employed? Why did the NIS not demand a place on the board? Was there a lien on the property? Has t been sold, and if so what has happened to the NIS debt? Where are our media? Has this matter been raised in parliament?

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  • “How could any responsible government take up $27 million dollars and lend one of the richest men on the island while our national stadium is in ruins?”

    it was hundreds of millions of dollars more than that, over decades…and then got the damn nerve to be up in UK bigging up this dying tIefing criminal POS…for bringing in polo horses with cocaine in their bellies..

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  • @ Northern.

    Yes I did check and notice performance data had been “censored and removed”

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  • @ Hal
    I understand the property has been sold so the NIS should get back their monies

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  • “for bringing in polo horses with cocaine in their bellies”….there are times when you need to stop and think about the logistics of what you claim. How are such horses transported? What do they cost? Can they ‘swallow’ like a human, or how does the drug get into their belly? How does it get out?
    I know, you really don’t care, it’s all about the emotional value and what ‘sounds good’…..lol

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  • @ William

    That is an enormous assumption. Was there a court order compelling the vendor’s attorney to hand over the money, or does it depend on good will?

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  • A bit of levity for us all.

    The writer above says and de ole man quotes

    “…I would bet money that their portfolio was encouraged by Sinkler to include a sizeable amount of the said paper caught up in the restructuring.

    Walter do have a (feel) roughly for what we are talking here dollar wise?..?

    heheheheh heheheheh heheheheh

    Like

  • Hal
    So a deal is struck in principle and a weak later the nation is addressed. What’s the problem? Stupse. Look there’s no need for the personality focused comments, stick to the subject matter. Not in the mood.

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  • @Hants
    Skipper, u went to Kolij.
    Here you have a multi millionaire who is otherwise in the construction biz. Imagine the contraband which can be stored in those pieces of large equipment. Even certain materials they may import. And he is going to place coke within his pride and joy, $50,000 and up trained polo ponies? And you post a story about a vet Student who to make some money put liquid heroin in puppies of no specific value?

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  • Why not take it a little further…a tiefing multimillionaire, who stole black people’s money land and whatever he could tief to call himself a millionaire to begin with. Has strong ties with Argentina…so there are no broken down throw away horses in Argentina where he maybe gets the horses, how will a custom officer know the difference, especially one who is being BRIBED…

    yall are pretending to have no imagination at all…ah bet ya if ya dig up some of that land he stole from the elderly ya mght find some skeletons of those same throw away horses..

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  • Northern…ya must think ya talking to the idiots in parliament, check yaself…you know well enuff how the cocaine will get into and out of the horse’s bellies…better yet…why don’t ya ask…not Edmund..he just croaked.>>but ya can ask Bruce Bailey…am sure ya knock back a glass or two with them TOO….just a matter of time before the VETS talk…

    and while ya at it…trying shutting up the english dude who knows all about it, ya know the one yall now calling crazy…

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  • Right now all i want to know is why the FOWLS are NOT cussing me over on the Rap Brown thread, that is not a lot to ask..lol

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  • @ Hal

    We would hope that’s not the case and the taxpayers get back something . We need to keep our eyes on these issues. According to the blogmaster government is a continuum so we will see what the other half of the Duopoly does. We should also play attention to how the disposal of CLICO assets are handled. Seems like all the corruption and transparency police gone to sleep.
    Ah wonder why?
    Oh now I know it’s because we now have integrity legislation; freedom of information act and all the former ministers are locked up.
    My memory slipping.
    Well done. We have been washed in the blood of the lamb.
    The Duopoly is indeed a continuum. The blogmaster is correct!

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  • @William

    The sale of Clico assets to to fill the shortfall found in the Clico asset register.

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  • “We would hope that’s not the case and the taxpayers get back something .”

    I don’t know how yall missed all of the info in the Sagicor business news MONTHS AGO, but i could swear it has been reported that the pensioner’s money that was funnelled to Apes Hill SCAM…is now only worth 5 MILLION DOLLARS..

    that short memory thing is going to cause yall to get ROBBED AGAIN..

    Like

  • @ William

    The views are irrelevant and unintellectual and are best ignored. How is government a continuum? Governments are not legally bound by the agreements of previous governments; that is our system. In other words, it is only out of courtesy and to prevent chaos that governments honour contracts signed by previous governments, such as bilateral and multilateral agreements. Not e Trump with NATO and NAFTA.
    Everything about Clico has been badly handled – by Trinidad, St Lucia, the Bahamas and Guyana, but moreso by Barbados. It is now over ten years since we have had the mess and still not a booby out of CARICOM. In Barbados we are still struggling.
    Remember, focus on incompetence, not corruption; administrative incompetence is a MAJOR problem in Barbados, best exposed by its bad financial regulation. Don’t be fooled by the titles and degrees.
    After the global financial crisis I had the good fortunes of observing major companies in trouble (ie Northern Rock, Coop Bank, etc) and how they have been resolved. More importantly, I took part in some of the debates surrounding them. It was a learning experience. A proper public debate, not a shouting match, has been missing in Barbados.
    Just look at the yaaboo nonsense about Mr Parris and David Thompson and alleged corruption.

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  • I have read where drugs have been transported in horses. They put the drugs by hand into the female horses vaginas (if that is what they are called) and remove them by hand later. A horse is not a woman and I understand some do this with women…..fisting.

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  • @ David

    Do you not find it strange that all the “ corrupt” portfolios that belonged to CLICO have been snapped by reputable companies such as SAGCOR?
    Don’t you see the rush to sell off CLICO agricultural holdings while we are being told that we need to revitalize and diversify our struggling agriculture sector?
    Don’t you think that a report and transparent public discourse is needed before we dispose of CLICO assets?
    Don’t you think that the taxpayers need to benefit from this obvious windfall after being hoodwinked into paying off CLICO investors also known as policy holders?
    Have you ever asked yourself why after a decade not a hair on any of CLICO corporate elites heads has been touched ?
    Have you abandoned your well known position on transparency?
    I ask the question again: why sell the CLICO corporate Centre when government has workers in sick buildings and is about to rent private properties to house workers?
    Why rent if you own a building that is already “ fit for purpose” ?

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  • John A
    “October 20, 2019 8:30 PM
    Well let’s see what White Oak did for their $27M USD in fees. We will break it down in simple bajan terms below.
    According to the statement we restructured $500 million USD in debt from an average rate of roughly 7.4 percent a year to 6.5 percent a year so that is 0.9 percent saved or = $4.5 M a year over 7 years or 31.5 M in total interest.”

    Vincent Codrington
    October 22, 2019 9:38 AM
    “Using the coupon rates as John A has done is adequate for purpose.”

    John A , and Vincent Codrington,
    My apologies for not being able to get back to make this comment earlier. We have some very bright young Barbadians out there, so we have to make sure that we don’t over simplify and leave first year students of financial mathematics laughing at us.

    Let us take a look at the bonds that represent the eligible debt again:
    A. 7.8% Fixed Rate Bonds due 2019
    B. Floating Rate Loan with final maturity in 2019

    At October 1, 2019, the present value of the future coupon cash flows on the above two bonds = 0. The bonds have matured!
    It is quite possible that the government of Barbados did not have the money to pay the Face Value (we are not given the amount) of these bonds at October 1, 2019 so they issued new bonds.
    The issuing of these new bonds would therefore represent additional costs not savings.

    However, if the creditors were demanding that the new bonds must be issued with the old coupon rate of 7.8% (Bond A for example) and will mature in 10 years time, and White Oak pushed back and secured a coupon rate of 6.5% instead, then White Oak would have saved Barbadian taxpayers $93,455* on every one million dollars borrowed via this bond, assuming we discount the cash flows at 6.5%.
    * Amount of savings = (7.8% – 6.5%) x (1 million dollars) x 10 year immediate annuity factor at 6.5%
    = 1.3% x 1,000,000 x 7.18883 = $93,455

    C. 7.25% Notes due 2021
    D. 7.00% Notes due 2022
    Similar analysis can be done on these two bonds. Ordinarily, at October 1, 2019, these bonds only had 2 and 3 years respectively left to maturity. Technically speaking, the additional 8 and 7 years of coupon payments under the new bonds respectively truly represent additional costs and not savings.
    Again, assuming an active role played by White Oak in securing a 6.5% rate vs the old rate, Barbadian taxpayers would have saved $53,916 and $35,944 per one million dollars borrowed respectively on Bonds C and D.

    E. 6.625% Notes due 2035
    The analysis of “savings” on this bond is slightly different.

    PV of coupon cash flows under the old bond (6.625% for 16 years, Face Value of 1,000,000)
    = 66250 x 9.68593 = $641,693

    PV of coupon cash flows under the new bond (6.5% for 10 years, Face Value of 1,000,000)
    = 65000 x 7.18883 = $ 467,274

    Savings = 641,693 – 467,274 = $174,419 per one million dollars borrowed on bond E.

    This is the best attempt that I can come up with, given the data presented.

    Clyde Mascoll stated publicly that no one in Barbados can do this work. Based on some of the comments expressed here on BU, I do not agree with him. The best method to determine if Barbadian companies and individuals can undertake any task is to put the project out to tender. It is only after Barbadians have been invited to bid and are “weighed in the balance and found wanting” that foreign companies and individuals should be considered.

    That is my view.

    Like

  • Dame Bajans
    October 23, 2019 12:31 PM
    “If you(Barbados) have to repay $64 million US next year in loans and interest, Mia will need a very, very large gathering. If the same amount or half that is due in 2021, she will need a gathering every year until 2033

    Dame Bajans,
    We will need at least USD35 million for 2021.
    At least 32.5 for coupon payments on the new bond issue maturing in 2029, and the remaining 2.5 million at maturity from the PDI bonds which were issued to cover some of the due and accrued interest at October 1, 2019.

    One way or the other, we will have to “cut and contrive”.

    Like

  • @ Walter.

    Your formulas I agree with but as you say with critical information missing go back to my comment to Vincent on October 20th at 10.37 and you will see where I came to the same conclusion as you.

    I bet him a drink that after the process is finish we will owe more in principal and interest over the protracted period at 6.5% than we owed prior to the restructuring. He refused to take my back.lol

    Like

  • Vincent Codrington October 23, 2019 9:29 AM

    @ David at 12:36 AM

    You may have missed it; but most bloggers are concerned about the endogenous responses to those external factors. The our responses are variables over which we have control

    Hell No except for a few whose drinks from the taxpayers trough
    Most are concerned about their daily lives existence
    Ok to talk about how much interest gonna be paid on bonds an exercise that needs a crystal ball because of the twist and turns in the markets
    However even having bonds the average person cannot take that bond at the drop of a hat to pay a bill
    People are looking for solutions that would advance their livelihoods to a better quality of life
    I have bonds before maturity i have to think about how much penalty and other fees would be taken
    Right now most sole purpose is finding a job sufficient and enough to put food on the table and cover all major household expenses
    Some body needs to pull Mia aside and asked her if after all the prancing around on World stage did she receive anything that is of quality to help the people

    Like

  • @ Walter.

    Also bear in mind the shorter the period and amounts were to the old due dates, the more those amounts will now cost us over the protracted period at the 6.5%, as the principal would remain but now we have 7 new years of interest added at the 6.5%.

    As you say tighten wunna belts and brace! 4

    Like

  • @William

    Do you have evidence that the sale of CLICO assets is not been done in a transparent manner? What shapes your view in this case?

    Are you not aware taxpayers have had to foot the shortfall by underwriting the cash/bonds issued to former policyholders(Reslife)?

    Like

  • @ Walter.

    You want an eye opener look at just this one scenario.

    Assume that of the $500M there was $250M due in the next 2 years with interest at 7.4%, jot dat down.

    Now take the same $250M and postpone the payment for 7 years at 6.5% and jot dat down.

    Now subtract the old from the new and fire a stiff drink!

    Like

  • @ David
    Exactly the taxpayers took the hit!
    I simply said that more public info should be out there. I have warned you not to try putting me in any box.
    I have no cocoa in sun so I ain’t looking for rain. I font have any clothes hanging out either. Thank you.

    Liked by 1 person

  • don’t not font

    Like

  • Who is putting you in a box. A question was asked of you, what gives you the impression the sales of clico assets is not being done in a transparent manner.

    Like

  • SirSimpleSimonPresidentForLife

    Don’t know a thing about economics nor finance but i haven’t bought any vegetables since late June, and i have enough to last me to the end of the year, maybe down to March. Eating well, a selection of green and red/yellow vegetables carrots, okras, tomatoes, first avocado today, enough left to last until the end of the year, soon sweet potatoes, cassava and yams. Getting plenty of good exercise. Blood pressure and blood sugar good. Plenty of vitimin D too. Bones strong.

    Sometimes the boys of BU cuss me and tell me to go back to the field. I have taken their advice, lolll!!!

    Liked by 1 person

  • Good that some can live on retirement and turn soil.in their back yard for food
    However most in modern day society have to work to pay bills and cannot afford the luxury of back yard farming and the cost overuns incuured becasue of high water bill and electric bills
    Not to mention tge cost of maintainence to the soil

    Like

  • David BU i think by now you know Skinners agenda.All he has done on this topic is to throw about innuendoes which he cannot prove and to play he tough talking about not being afraid of little boys in long pants.Skinner no one is afraid of you neither.David BU asked you a question why don,t you answer and leave out the shite talk.The cue for you is to mention Mr Thompson or any Dem in a negative light and out you , Austin and Mariposa come.Tells us all we need to know.On this topic saw Enuff state Ms Mottley will address the creditors settlement soon take a chill pill.

    Liked by 1 person

  • Vincent Codrington

    Let the horses neigh
    And the donkeys bray
    For the higher the monkey climbs
    The more he exposes his rs.

    Like

  • @Vincent

    Can you explain why on a blog of this import we have commenters interjecting with nonsense about smuggling drugs in horse bellies?

    Like

  • John A
    October 23, 2019 6:30 PM

    “@ Walter.
    You want an eye opener look at just this one scenario.
    Assume that of the $500M there was $250M due in the next 2 years with interest at 7.4%, jot dat down.
    Now take the same $250M and postpone the payment for 7 years at 6.5% and jot dat down.
    Now subtract the old from the new and fire a stiff drink!”

    John A,
    Since we are using the same interest rate to calculate the coupons, and to discount the coupons and principal back to the present, I would expect the discounted cash flows of both bonds to amount to the original 250 million. So the difference between them will be zero!

    Mathematically,
    PV of cash flows = PV of coupons + PV of Face Amount
    =250 x i x (1-v^n)/i + 250 v^n (note that the i cancel out each other)
    = 250 – 250v^n + 250v^n
    =250
    This will always work for any bond with any “n” (number of years to maturity), and any “i” (coupon and discount rate).

    Why do you keep thinking the maturity date of the new bonds is 7 years away?
    2029 is 10 years in the distance, my friend.

    My apologies to BU readers for this highly technical comment, although somebody somewhere in the world might find this helpful, homework wise. You get to see what some of my work entails and I can picture most of you scrolling past and saying “yuck”.

    Like

  • @ Walter.

    Lol yes 10 yrs sorry about that. Where the hell I get 7 yrs from? I must be was thinking how many years i got to wait for pension! 😁

    Like

  • Vincent Codrington

    @ David BU at 7 :44 PM

    Have patience,David . In this age of data mining one may discern more than is intended. Your advice is to scroll by. But ,I agree it is distracting and very often exhausting.

    Like

  • Vincent Codrington

    @ John A at 8 :01 PM

    10 yrs will give you enough time to procreate future workers who contribute to the pension fund….. the main revenue stream for pension payments.
    Stop engaging in ” what if” calculations based on tenuous assumptions. You will have to replicate the exercise if you ever get the actual figures. Please review your notes on “duration”( McCauley etc.)

    Like

  • Barbados won by having it immediate debt repayments reduced – it lost because it still have to pay back all the debt eventually.

    The creditors lost by not getting what was due to them when they expected it – they won in that the will get back all their money and maybe a little more but over a longer period of time.

    As Stephen mention, paying the creditors what was due to them (or as close to as possible) is good for Barbados reputation in the future.

    As Walter mentioned WE ARE NOT ROBBING THE CREDITORS.

    It was A debt RESTRUCTORING exercise.

    John A. why do you keep on look to show that Barbados is coming out with the short end of the stick?

    You already know that we were not able to pay our debt up front (or we would have)
    The creditor took a hit for 18 months.
    I see no problem with them getting a little more at the backend of the restructure for the relief Barbados is getting at the front end.

    Like

  • @ Vincent.

    I don’t feel so as I don’t anticipate getting the relevant figures. As for the contribution over the next 10 years, that will depend on an urgent implementation of a growth plan, if not NIS receipts may well fall as a result of further contraction in our economy. Based on these uncertainties i can only look at where we are now.

    @ John 2

    Why because I pay WO the sum of $27M to save money or are you willing to right their bill off too?

    Why is it that as anyone starts to look seriously at numbers the party faithfuls get restless?

    This is an exercise we must all learn from. Not only our era but the younger people out there as well. Let us therefore ventilate the issue fully and encourage their participation, or do you think sweeping it under the rug is a better move?

    Like

  • A few months ago you were calling on government to settle, when conditions/agreement may not have been have been as favorable as they are for us now in the final agreement.

    Now that we Barbados) that we have a final/better (than a few months ago) u want to tear holes in it.

    If we had settled when you want to you didn’t care about what would have been the value of the NIS bonds back then but now we have settled NIS is going to be a problem.

    Cant please the man

    Like

  • Why when any one don’t agree with you they are consider party faithfuls?

    Like

  • John2

    I wasn’t aware we had an agreement a few months ago, please share the details of that agreement with me. What I can tell you is the full cost of the delay was the first thing the creditors made us pick up hence reducing the actual physical forgiveness considerably. Anyhow Persaud et all will still be paid no problem.

    For once put down your party blinkers and look at the facts.

    Liked by 1 person

  • I been monitor this blog long enough to know the loyalist on both sides of the fence. Surely Lorenzo and Enuf will be out soon too towing the defence line. Lol

    Liked by 1 person

  • I don’t not agree the fees for WO but they did what they were hired to do – that’s get the some debt repayment from on our shoulders in the now and near future.

    What you looking for is a lump sum saving.

    Go back and listen to what stephe said carefully. I totally agree with him

    paying back all of our debt will be good for us in the future. Creditors will see that even though we hit hard time that we are serious about repaying what we owe.

    Like

  • My concerns for the NIS have been made public going back to the local restructuring where I said ” the fact that the fund will lose close to 1 billion on their paper is a concern to me.”

    When Prime Minister Arthur came a couple weeks later and said he saw the loss to the NIS to exceed a billion he too was dismissed. Time had proven the adjustment will now exceed a billion.

    Liked by 1 person

  • @John A

    Grenada suffered two restructuring of debt and a short time later is considered the fastest growth economy in the English speaking Caribbean.

    https://www.imf.org/~/media/Files/Publications/WP/2017/wp17171.ashx

    Like

  • A.

    I mentioned on this blog many time. I am not loyal to any party.
    But at this time my support is with the government – considering what we went through with the last one and I don’t think any of the third parties are ready.
    I don’t hide.
    But I have never voted or is a member of any party. I personal have seen 3 bajan politicians in my life but do not have a relation with them. cannot even remember say a word to any of them.

    the same way u can exercise your rights to be a “state person” I should be able to express my support for any party I chose to support in anyway. But I have no loyality to any party. if you want to stick to that line than I can say u are a support of the past government.

    Now again I am in support of the blp now get over it

    Like

  • “I mentioned on this blog many time. I am not loyal to any party.”

    ya just started, ya will hear that for years to come, the idiocy is REAL…it’s only after 7 years i don’t hear it anymore, except from Grenville, but everyone knows he is soft in the head, so that don’t count.

    Like

  • John2
    I wasn’t aware we had an agreement a few months ago, please share the details of that agreement with me. What I can tell you is the full cost of the delay was the first thing the creditors made us pick up hence reducing the actual physical forgiveness considerably. Anyhow Persaud et all will still be paid no problem.
    For once put down your party blinkers and look at the facts.

    John

    There was no agreement.
    Yet you were calling for one without know any details or how they would have affected the NIS if we had settled at that time.

    Like

  • @John 2

    I said a week ago I was glad to see an agreement reached on at least the $500M.

    What we have been discussing over the last 2 days though is what the restructuring will now cost us in real terms. As I said a week ago the PM had no option. If you read back my comments you will see I said ” The PM can not be blamed for this it just happened the debt can stopped at her feet.”

    What we are attempting to ventilate now is the effect of the restructuring on entities like the NIS. In other words what must we as a people now do to put the fund back on sound footing. What will be required to replenish let’s say the billion lost over the next 10 years while still growing the fund.

    So yes one issue will lead to another and to discuss them does not mean criticism. It does however mean that we recognise the side effects and are willing to face them. Remember the approach Sinkler used of kicking the debt can down the road and ignoring the reality proved a dismal failure. Don’t let us today make the same mistake by avoiding the discussions that must follow.

    Like

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