Bahamas Power and Light (BPL) will miss another self-imposed milestone for the issuing of its rate reduction bond, having hoped that February would be the month the country’s power provider could raise more than half of a billion dollars.
However, the utility’s Chairman Dr. Donovan Moxey told Guardian Business yesterday that while BPL wanted the amended legislation needed for the placement of the bond brought to Parliament much earlier, it simply didn’t happen.
“Where we are right now is that we’ve been making great progress on the bond issue,” he said.
“Obviously, the teams are all working together now. We’re looking to get in front of Cabinet and then obviously take it to Parliament in short order. Obviously, we wanted to have things done a lot quicker. Those things didn’t happen, but the teams are working. Everybody is fully engaged and so we’re pushing hard to get the legislative amendments passed as soon as possible and obviously close the deal over the next several weeks.”
Moxey said the amendments are key, given that without them there is still no real foundation in law for the placement of the rate reduction bond on the international market. He explained that the amendments to the Rate Reduction Bond Act ensure that the transaction will be accepted by possible investors.
“Given the fact that we are floating this bond and financing both locally and internationally, the fact that it is indeed a rate reduction bond, there were certain amendments that we needed to put in place to make sure that across the board, this transaction would be acceptable to the investors from a legal standpoint,” said Moxey.
“Because this is really sort of that first financing, where the securitization of the financing is tied to law, one of the things we have been looking at is to ensure all of the necessary provisions within the act would be acceptable to the investors. And so there are a number of technical and legal things that we looked at and understood that we needed to make certain amendments, in order to make sure that investors who do look at this particular deal are comfortable with the structure of it and the legislation that supports it.”
The COVID-19 pandemic was the biggest wrench thrown into BPL’s spokes with regard to raising more than $530 million in the international markets, as the company was set to take the bond to market before the pandemic was recognized as a global problem early last year.