Home' Trinidad and Tobago Guardian : August 7th 2014 Contents AUGUST 2014 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
COVER STORY | BG5
Felicia Persaud, founder,
Invest Caribbean Now,
Jason Julien, general
manager, First Citizens
Sana Ragbir, assistant
general manager, First
Services, and Sheila
walked away with the
Excellence Award at the
Invest Caribbean Now
summit held on June 4,
2014 at the Harvard Club
in New York City.
The Central Bank said: "This is a regular
feature of the bank s on-going monitoring
and management of evolving liquidity con-
Financial sources indicate that the Gov-
ernment and its execution agencies could be
in the market for an additional $4 billion in
order to balance the State s fiscal books before
the 2015 budget, which is expected in Sep-
The Central Bank said that it does not think
that the bond issues will have an impact on
government s ability to raise funds to balance
its fiscal books by the end of the fiscal year.
"The banking system is liquid enough to
accommodate these bond issues as well as
the planned bond issues by GORTT (Gov-
ernment of the Republic of T&T)."
In April, Massy Holdings announced that
RBC Merchant Bank would issue fixed-rate
bonds in T&T dollars not exceeding $1.2 bil-
On Tuesday, Massy chief executive Gervase
Warner said he thought the issuance of bonds
was a success:
From the feedback on the road show and
the fact that the bond was oversubscribed
and yields were below the coupons that were
prescribed. Massy definitely considers it a
"Overall we are very pleased with the bond
subscription. The RBC team did an excellent
job. Firstly, they were the only bank to propose
the private auction model that aligned with
Massy s interests in getting lower yields. Hav-
ing proven successful for this transaction, I
am sure that others will follow.
"Secondly, RBC also did an excellent job
promoting the bond to institutional investors
who are in great need of solid, long-term
investment instruments for their portfolios.
"Lastly, RBC was very professional and
transparent in the operation of the auction.
We have great praise for their separation of
bid operations from the team promoting the
bond and for ensuring bidder confidentiality
throughout the entire process."
Warner said both the 10-year and 15 bonds
for $600 million each were over-subscribed
with the shorter note attracting subscriptions
of $1.046 billion and the longer one attracting
interest of $1.142 billion.
It was reported that $700 million
of the $1.2 billion was to repay
Massy s existing debt. By how much
does this lower Massy s annual debt
Our absolute debt increases to a manageable
level and it will be reflected in our September
reporting. The debt that will be repaid is short-
term debt (carrying lower interest rates), so
we expect annual debt service to increase in
the short term, still within a manageable level
for the group. The benefit is, of course, lock-
ing-in relatively low interest rates over a very
Like many financial experts, we believe the
low interest rate environment will not prevail
forever and higher interest rates are likely to
be seen in T&T in the not too distant future.
How does it change the debt ratios?
Our absolute debt ratio increases but will
remain at a very manageable level and it will
be reflected in our September reporting. Massy
has carried relatively low debt ratios for many
years. The group has the capacity to accom-
modate the new debt ratio.
With regard to the $500 million balance,
the notice in April had mentioned that "the
remainder of the proceeds will be used to fund
future strategic acquisitions and expansions
of the company s business, throughout the
Caribbean basin" as well as pay fees.
Can you say anything else about
the $500 million?
Yes. Part of the proceeds will be for our
equity position in the Methanol to DME facility.
In addition, part of the proceeds will be used
to fund other growth initiatives such as con-
tinued investments in Colombia, expansion
of our supermarket network in Trinidad as
well as in Guyana and other strategic invest-
ments our ITC and other business units
throughout the region.
On the issue of whether the bond issue was
a success, RBC said:
"Very much so, apart from the transaction
being a landmark in terms of the issue size
for a non-sovereign related issue, we imple-
mented an innovative structure which aligned
the interests of RBC, the Massy Group and
local institutional investors.
"This unique approach gave us the ability
to not only raise the required TT$1.2 billion
at the most competitive rates possible for the
Massy Group, but it also allowed for a fair and
transparent allocation to local investors based
purely on the market forces of demand and
"This transaction is a testament of RBC s
commitment to its clients to think outside the
box to provide solutions to address their needs
and we thank the Massy Group for placing
their faith and trust in us to deliver on this
RBC cited client confidentiality in declining
to answer questions on whether any of the
$700 million that Massy is using to repay
existing debt is being used to take out any
existing RBC debt.
The Canadian-owned bank also decline to
disclose how much of the $1.2 billion in Massy
bonds would be retained on RBC s books for
its Roytrin family of mutual funds.
Asked which companies acquired the bonds
and if there was any regional interest---such
as Sagicor, JMMB, NCBJ---RBC said:
"The bonds were acquired and marketed to
all the major institutional investors in T&T
who have a demand for long-term investments,
which would include fund and asset managers,
insurance companies, pension plans, credit
unions and other financial institutions. The
marketing of the bonds were limited strictly
Warner: Very pleased with bond issue
From Page 4
on 10-year bond
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