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(SNO) – Minister responsible for Finance within the Office of the Prime Minister, Ubaldus Raymond, today (August 6, 2018) attempted to ease tensions among pensioners over government’s decision to borrow $100 million from the National Insurance Corporation (NIC) to settle two of its bonds that matured last week.
He, at the same time, said the money will be repaid by the 26th day of this month.
Raymond then apologised to pensioners for the fear and discomfort that he claimed were created by the opposition Saint Lucia Labour Party (SLP) and which existed amongst them when it became known that government sought the Corporation’s help in meeting its bonds obligation.
“You will recall that there was an attempt to create mayhem, fear among pensioners of the NIC. I want to reassure the pensioners that your investment is safe,” Raymond said.
The minister told reporters that he found it fitting to give an update on the two bonds “because of misinformation by the Opposition”.
He said that politicians should not try to create discomfort among individuals who have worked so hard on behalf of this country.
According to Raymond, the $70 million bond and the $50 million matured on July 31 and August 2 of this year. They were taken eight and 10 years ago.
He said the bonds were rolled over and that the $70 million bond was over-subscribed while the other was fully subscribed.
“The government went out to get $70 million and investors had such a great appetite for our bonds we actually raised $80 million, $10 million more,” Raymond said.
He claimed that this was a sign that the investment community has confidence in the economy and the government. He promised that the $100 million (Treasury bill) loaned from the NIC will be repaid on the 26th of this month.
Minister Raymond noted that when the bonds were taken eight and ten years ago they were taken at a 7.5 percent interest rate, however today, the Ministry of Finance was able to negotiate interest rates at 7.25 percent, a quarter of a percentage point less.
“This is actually good news seeing that this was done in an environment of growing interest rates,” Raymond said.
The SLP, last month, had some misgivings about government approaching the NIC for money to service these bonds.
The party’s leader Philip J. Pierre had asked several questions of the government regarding what at the time appeared to be the refusal of the bond holders to roll over the financial instruments.
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