Nassau Cruise Port Limited’s (NCP) recent bond offering is 50 percent subscribed, with only one week left before it closes, but Global Ports Holding (NCP’s parent company) Chairman Mehmet Kutman said any shortfall in the $130 million bond subscription will be “made up” .
Kutman added: “This project is my baby.”
NCP is redeveloping the Port of Nassau into a world-class cruise port. Industry pundits contend Nassau’s port will be redeveloped just in time to be a primary destination for when the cruise industry recovers post-coronavirus (COVID-19).
According to Colina Financial Advisors Ltd. (CFAL) President Anthony Ferguson, while interest in the bond has been high, there has been a lot of inquiries from investors who don’t meet the accredited investor definition for this particular offering.
“We are halfway through [the offering period] and we are a little bit more than halfway through the funds that we’re getting in,” said Ferguson.
“We unfortunately have a lot of inquiries from smaller investors…and so we still need to talk with the board in terms of how do we address them in the future to ensure that they can participate.”
Kutman said while he is sure the bond will be fully subscribed by the end of the subscription period on Friday, he assured this paper that if it is not, the full $130 million will be made available to begin the substantive redevelopment of the port.
“This project will get done one way or the other,” said Kutman. “If there is anything missing, we will make it up.”
The private placement bond offering, which has a minimum $50,000 investment and will raise $80 million in Bahamian dollars and $50 million in U.S. dollars, will have a 20-year final maturity and an interest rate of eight percent per annum. It will be used to begin the extension of the Port of Nassau’s berthing capacity; the creation of a new inner harbor to facilitate the transfer of cruise passengers by sea; the creation of recreational, entertainment, retail and food and beverage spaces and related design, engineering and inspection costs.
According to Kutman, this is the kind of investment smart investors are looking for, given the global financial climate. He said the likes of NCP’s eight percent bond rate will not be seen again within the next year.
He said given the severity of the global economic impact of COVID-19, one of his biggest fears is extreme inflation in two to three years, contending that this recession will be worse than previous ones.
“This is not 9/11,” Kutman said.
But all signs point to a recovery in the cruise industry, priming NCP’s newly redeveloped port for a spike in visitors over the long term.