Bond deal just a ploy for a few to make money on taxpayers’ backs- Jagdeo

Oct 05, 2018 News

Opposition Leader, Bharrat Jagdeo hosted his press conference in the yard due to blackout

The People’s Progressive Party/Civic (PPP/C) Government never sought a bond to the magnitude of the $30B the APNU+AFC government secured “supposedly” for GuySuCo. Further, the smaller bonds that were taken by the PPP/C never attracted any fixer or arranger’s fee.
This was noted by Opposition Leader Bharrat Jagdeo at a press conference he hosted yesterday outside his Church Street Office. Jagdeo was forced to host the presser in the yard because of blackout.
One of the many topical issues Jagdeo commented on yesterday was the $30B bond.
Jagdeo said that he is still trying to make sense of the bond; he still cannot see a good economic reason why Government would opt for such an arrangement at this time.
Jagdeo spoke about the placement memorandum for the first $17.5M secured by the Special Purpose Unit of the National Industrial and Commercial Investment Limited (NICIL).
He said that the memorandum did not even state that the money will be used for GuySuCo.
Jagdeo said the very memorandum stated that the PPP has a member on the Board of NICIL, “and that is not so.”
Further, Jagdeo noted that the memo reflected some “unrealistic projections” about GuySuCo’s future income. It projected that GuySuCo would have raked in $14B from land sales this year and over $20B next year.
“And then there is the arranger’s fee. So, the arranger will be paid, the lawyers will be paid, we would be paying out close to $200M without even utilizing the money.”
The Opposition Leader said that he recently received a letter stating that “the point person from the institution arranging the bond is related to one of the Members of the Board of NICIL.
“That, if it is true, is really a serious issue. That would explain the rush to raise all of the money—because the arranger then gets a percentage—even though you do not need the money now and even though the tax payers have to pay a 4.75 percent interest.”
Jagdeo said that the bond should not attract such a high interest rate seeing that it is covered by state assets.
“They issued a sovereign grantee; this is an unbelievable type of bond. If I had a lot of money I would put all to the bond. You get this bond at 4.75 percent interest when the bank rate is at 1 percent. The returns are tax free. It is collateralized by the assets of NICIL and on top of that you have a sovereign guarantee. Such a bond should not really have that kind of spread above the going rate because it is grantee.”
Jagdeo said that the bond is nothing more than a “great opportunity for people to make money at the expense of sugar workers and other taxpayers.”

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