Three years after completing its debt restructuring programme, the Government of Barbados is issuing its first major bond offer, confirming its return to the bond market.

The Bds$125 million Treasury Notes, which opened on November 22, is aimed at raising funds to assist with the financing of the economic recovery from the coronavirus (COVID-19) pandemic.

The notes, which are available from $1,000 and up and attracts an interest rate of 4.25 per cent, will be issued on December 1, 2021, and will maturity in 2026.

Interest will be payable on February 28, May 31, August 31 and November 30 of each year. According to Central Bank Governor Cleviston Haynes, “the bond is targeted to all investors and represents the first step towards restoring normality to the domestic capital market, while creating greater balance between new domestic and external funding.”

Barbados’ public debt as of September 30 stood at $13.1 billion, of which Treasury Bills outstanding totalled $495.1 million, according to Central Bank records.

The Central Bank Governor is urging pension funds in Barbados to invest in government securities pointing out that, “the bond is targeted to all investors and represents the first step towards restoring normality to the domestic capital market, while creating greater balance between new domestic and external funding.

Addressing the annual Eckler Pension Investment conference on November 23, Governor Haynes emphasized that the new debt issuance was consistent with the macroeconomic framework under the Barbados Economic Recovery and Transformation (BERT) programme with the International Monetary Fund (IMF) and was in line with the medium-term debt trajectory which aims to reach 60 per cent by financial year 2035/36.

He pointed out that while government had withdrawn from new debt issuance, apart from the Barbados Optional Savings Scheme (BOSS) bonds that were specifically targeted to public servants, the focus has been on retiring debt and this has contributed to the build-up of excess liquidity in the financial system.