The government has borrowed $1.095 billion in Bahamian dollars and $445.7 million in foreign currency, according to the Fourth Quarter Fiscal Snapshot and Report for the fiscal year 2019/2020.
While the government has repaid $826.9 million of its debt to the end of June 2020, government debt stood at $8.241 billion at the end of June, accounting for 68.4 percent of gross domestic product (GDP), up from the $7.527 billion recorded at the end of June 2019.
As it stands, 45 percent of government borrowings are in the form of loans, with 36 percent in bonds, 15 percent in treasury bills and 4 percent accounting for advances.
“The government’s operational requirements resulted in a net increase in its debt obligations of $714.4 million for FY2019/20. Short-term funding comprised $228 million in treasury bills and another $60 million in Central Bank advances, the latter being repaid within the fiscal year,” the report states.
In the fourth quarter of FY2019/20, the government contributed an additional $16.5 million to the sinking funds — established to retire future debt obligations — bringing total contributions to $46.5 million for the twelve-month period, according to the Ministry of Finance.
“As at June 2020, the three arrangements earmarked for scheduled retirement of external bonds held a cumulative value of $181.8 million, while the funds set aside for the two local arrangements stood at $13.2 million,” the report notes.
“Equity investments for FY2019/20 consisted of the second and third quarter incremental $10.3 million contribution to Lucayan Renewal Holdings Ltd. — the special purpose vehicle created to house transactions related to the Grand Lucayan purchase. During the third quarter, the government signed a heads of agreement with Bahamas Port Investments Ltd. — a joint company of Royal Caribbean International and the ICM Group — for the sale of the resort and the development of a cruise port in Grand Bahama.”
The Ministry of Finance also highlighted two shareholder loans of $15 million each, made to Bahamas Power and Light (BPL) in June 2019 and August 2019, respectively, which were originally due to be repaid in December 2019.
“While BPL continued to service the loans according to the loan agreement, the maturities have been extended to September 2020 because of the ongoing delay in the rate reduction bond transaction, now exacerbated by the COVID-19 pandemic,” the report states.