The government refinanced the $246 million bridge loan facility it assumed responsibility for in 2020 to cover the Bahamas Power and Light’s (BPL) legacy debt.
Documents obtained by Guardian Business reveal that the refinancing took place on January 28, after the government was unable to make the balloon payment even after an extension.
The bridge loan facility was refinanced at a lower amount of $171.8 million, set to mature in five years.
BPL planned on repaying that loan facility through its rate reduction bond (RRB), which had several setbacks during the course of the COVID-19 pandemic.
“Before further legislative changes necessary to permit issuance of the rate reduction bond could be made, BPL was faced with the virtual closure of capital markets. On June 11, 2020, BEC [Bahamas Electricity Corporation] was obligated to make a balloon payment for legacy debt in the amount of US$246 million. As result, the government agreed to the transfer and effected a transfer of the US$246 million loan from the BEC’s balance sheet to the balance sheet of the government on July 24, 2020, under a new US$246 million bridge facility between the creditors and the government, to mature on July 23, 2021,” an investor document reveals.
“Because of the ongoing delays in the issuance of the rate reduction bond meant to provide the funds for retiring the bridge facility, the government obtained an extension in the maturity date of the US$246 million bridge facility to January 28, 2022. Since the change in political administration in September 2021, the government has decided to await the outcome of the ongoing operational review of BPL before making a final decision on whether and when to proceed with the proposed rate reduction bonds. In the interim, on January 28, 2022, the government refinanced the US$246 million bridge at maturity with a subset of the same creditors for a reduced amount of US$171.8 million, which is to mature over a five-year period ending January 28, 2027.”
BPL originally entered into a facility agreement for $211 million between lenders Bank of The Bahamas, Credit Suisse, FirstCaribbean International Bank, Royal Bank, Scotiabank and the National Insurance Board on October 2, 2009, amending it on December 14, 2014 and again on March 8, 2018.
A separate facility agreement was entered into on August 24, 2012 with FirstCaribbean International Bank for $35 million and reinstated in December 2014 and March 2018.
Both facilities were expected to reach their extended maturity dates on June 11, 2020, where they were due payable in full.
According to the investor documents, BPL had total assets of approximately $855.7 million, total liabilities of approximately $709.5 million, total shareholders’ equity of approximately $146.2 million, and a consolidated net comprehensive income of approximately $17.7 million for the fiscal period ending June 30, 2019.