Bannister confident of BPL rate reduction bond placement

While there was concern that Bahamas Power and Light’s (BPL) $535 million rate reduction bond placement would be mired by the high 8.95 percent coupon government’s recent $600 million U.S. dollar borrowing attracted, Minister of Public Works Desmond Bannister told Guardian Business yesterday that there are “absolutely no worries” in BPL’s ability to successfully place its bond at a respectable interest rate.

Bannister added that amendments will have to be made to the Electricity Rate Reduction Bond Act before the bond can be placed.

He added that the placement would therefore likely happen in the new year, though BPL Chairman Dr. Donovan Moxey told this paper recently that the company was still shooting for the end of 2020.

“I suspect it’s going to be in the new year simply because we have to bring more amendments to the act to Parliament, but once we’ve written those amendments in, then they’ll be able to go ahead and complete the transaction they’ve contemplated,” said Bannister.

Last week on Thursday, Standard and Poor’s downgraded the country’s sovereign credit rating, spawning concerns about the country’s deteriorating borrowing potential as a whole.

While Bannister would not say what his confidence in the market is based on, he would only say that he is aware of where negotiations are currently.

“I’m fully aware of everything that is happening,” said Bannister.

“I am fully aware of all negotiations, all discussions and there are absolutely no worries about BPL’s bond.”

When asked if BPL will get an interest rate they can live with, Bannister said, “Absolutely.”

The delayed placement of the bond as a result of the global COVID-19 pandemic has forced the company to delay the construction of station D at its Clifton Pier facility, meaning the delay of 100 megawatts of new power.

BPL’s Director of Public Relations Quincy Parker said in September that the station should have broken ground in April, when the country was in the throes of its first surge of COVID-19 cases.

Parker said for now BPL is in a “holding pattern” until the placement of the bond.

“Station D was initially supposed to be built out of the bond funding,” Parker said.

“Since we are delayed going out with the bond, then that automatically pushes the timeline for station D back.

“Until such time as we have a better idea of the bond timing, there is not really a timeline for station D that we are willing to be committed to.”

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source https://thenassauguardian.com/bannister-confident-of-bpl-rate-reduction-bond-placement/