The Finance Ministry has announced TT’s successful return to the international debt capital markets after three years, with the issuance of an oversubscribed US$560 million bond offer.
On Monday, the Government through the Finance Ministry issued the senior unsecured long seven-year notes at a coupon of 5.950 per cent on the international capital market.
In a release, the Finance Ministry said Scotiabank and JP Morgan acted as joint lead managers and book runners for the transaction.
“This was done in tandem with TT’s announcement on September 5 of the commencement of a cash tender offer to purchase any and all of the outstanding US$550 million aggregate principal amount of its 4.375 per cent notes due 2024,” the release said.
The marketing strategy for the transaction consisted of group investor calls with Finance Minister Colm Imbert and 36 potential international investors. A virtual roadshow presentation was also made available to investors, garnering participation from 91 different accounts.
“To help mitigate recent market volatility, the Republic strategically monitored developments in the market on a daily basis; targeting the most opportune day (September 11) to announce the new issue transaction. Investors reacted positively to the pricing strategy; taking advantage of the limited supply and demand from quality accounts, which drove the order book to reach US$1.5 billion at peak, representing an oversubscription of three times for the new benchmark,” it said.
The release added that key investors – consisting of mostly asset managers based in North America – displayed a significant appetite for TT’s offering, enabling the placement of the bond with international investors based in North America (71 per cent); Europe, the Middle East, and Africa (27 per cent); as well as Latin America and Asia.
“Asset managers purchased 79 per cent of the issue, followed by pension funds with 15 per cent, insurance companies with three per cent, and banks with two per cent, as well as other investors with one per cent,” it said.
The ministry said this landmark transaction reflects TT’s resiliency in the capital markets, despite recent volatility caused by the unprecedented sharp rise in the interest rates of US seven-year treasury bills, which have increased by four per cent from 0.36 per cent in 2020 to 4.37 per cent in 2023.
“Comprehensive preparation, good management of the country’s fiscal accounts and rapid but strategic execution have allowed us to manage refinancing risk in a way that is protective of our public finances,” Imbert said.
He added that the exceptional success of this issue underscores the market’s confidence in TT’s credit and sustainability profile.
According to the release, proceeds from the issuance and sale of the notes will be used for refinancing of TT’s outstanding 4.375 per cent notes due January 2024.