Historic US$150M GuySuCo bond shows confidence in economy

Historic US$150M GuySuCo bond shows confidence in economy – Devindra Kissoon

Jun 03, 2018 News

Attorney Devindra Kissoon

London House Chambers’ Attorney Devindra Kissoon said the historic US$150M bond secured for the Guyana Sugar Corporation (GuySuCo) represents confidence by investors in Guyana’s economy.
Kissoon represented Republic Bank Limited (RBL) in the transaction.
“This is the first type of transaction of its kind in Guyana. The magnitude of it is certainly unique to Guyana and is one of the largest financial transactions in the Caribbean. What it does show is the confidence of investors to be able to lend money to Guyana with the hope of recouping it,” Kissoon stated.
He stated that the bond was oversubscribed which meant that there were persons dying to put their money into Guyana on the strength of a government guarantee.
“It shows that we have a credible country and credible economy,” Kissoon noted.
The transaction was consummated entirely using Guyanese companies and local legal counsel, Hand-in-Hand Trust Corporation acting as Trustee, Guyana Americas Merchant Bank Inc. as paying agent.
The state-owned National Industrial and Commercial Investments Limited (NICIL) received the first tranche, roughly US$85M which was disbursed on May 24, 2018, with the residual tranche to be issued to NICIL as is needed.
The full bond which was arranged by Republic Bank Limited exclusively through its Investment Banking Division represents Guyana’s aggressive reentry into the capital markets arena.
According to information, the Government guaranteed bond has been issued for a five-year term with a rate of return of 4.75 percent per annum.
NICIL is expected to raise the remaining US$65M within the next few months through a combination of local and regional investors, including those in Trinidad and Jamaica.
Republic Bank was reportedly able to successfully tap the local investor market to raise mutually beneficial financing for the Guyana Government and investing subscribers.
The funds raised are to be used towards GuySuCo’s capital expenditure and general operations.
NICIL’s team lead by Colvin Health-London, the head of the Special Purpose Unit (SPU), structured the bond to recapitalize GuySuCo’s operations.
GuySuCo has struggled to raise the funds needed to revamp its operations and relied heavily on Government bailouts to stay afloat.
The estates have been placed under the SPU which is tasked by Government to execute privatization plans for the Skeldon, Rose Hall, Enmore and Wales Estates that were closed in keeping with Government’s ‘right-sized’ approach for the sugar corporation.