Beginning this month, Bahamas government registered stock will be listed on the Bahamas International Securities Exchange (BISX), the Ministry of Finance revealed in a press release yesterday, opening up the market on government bonds and allowing market forces to determine the daily value.
This month, bonds will be listed on BISX, but the trading of government bonds will not commence until November.
Deputy Prime Minister and Minister of Finance Peter Turnquest hailed the move as a modernization that will stimulate Bahamian capital markets.
“We are getting ready to list over 200 government bonds, which represent the entire portfolio of outstanding securities going back to 1999,” Turnquest said in the release.
“This is another area where the government is making good on its promise to modernize and keep pace with the digital transformation happening globally, and introduce more efficiency to the government’s borrowing. Centralized market trading of government bonds is an important component for the growth of the entire Bahamian capital market. It’s been a long time in the making and I am proud that this government’s leadership has helped to finally bring this project to fruition.”
This move brings government securities fully into a digital space and has been a collaborative project of BISX, the Ministry of Finance and The Central Bank of The Bahamas, the release stated.
“Several changes are being implemented, including the creation of a centralized marketplace for all Bahamas government debt dollar securities,” the release added.
The project’s phases include the listing, the launching of a Bahamas government registered stock depository, and the transition to a paperless registry.
Turnquest said in the release that Bahamians will now have “easy access to investment information and market activity on all government bonds”.
“… and there will be transparency around the pricing of government securities,” he said.
“Lastly, Bahamians will be able to see and have an opportunity to trade outstanding securities on an open market.”
According to the release, “The initial prices for the bonds will be set by the central bank’s existing pricing structure until trading begins; government bonds will no longer be fixed at par; investors who plan to sell their securities before maturity will be subject to the current market price and any associated fees; trading will have no impact on the maturing value of a security held to maturity; and regardless of the market value, interest and principal payments will not change from the terms set out in the respective initial public offerings for all investors;
The release further notes that “Investors participating in new issuances of government securities in excess of $100,000 will need to utilize a broker to purchase these securities; investors with existing holdings that were purchased through the central bank can continue to sell those holdings directly through the central bank or through a broker; and investors with existing holdings or new issuances $100,000 and below have the option of buying and selling those holdings directly through the central bank or through a broker.”