RF Bank & Trust to raise $150 mil. to fund family island airports

RF Bank & Trust (RF) has emerged as a public-private partnership (PPP) player that the government said would be utilized to build several new airports across the country. The bank plans to raise $150 million for the projects, an RF press statement revealed, adding that this PPP will be one that allows Bahamians to invest in those new airports.

Director of Aviation Algernon Cargill told Guardian Business yesterday that RF’s involvement in the airport development project will mean that the Bahamas Airport Authority (BAA) will have access to immediate funding for the airports. The government will not have to expend the money for the developments and Bahamians will have the opportunity to invest.

He said the government has been working on the partnership for some time. Cargill further noted in the RF statement that the investment will help to ensure that the airports meet international standards.

“It takes the strain away from the government’s cash flow and allows cash flow to be able to fund the airport projects going forward,” Cargill said.

“So, it’s a great investment opportunity and it’s our intention to ensure that this investment is for Bahamians to invest in their airports’ developments. Also, we’re reserving a small portion of the investments, so that Bahamians with small amounts can invest in the airport projects to get a higher return than normal returns on fixed deposits and savings accounts in the market.

“Deficiencies in family island airports greatly impede their earning potential from a commercial and a tourism standpoint. Through this public-private partnership, we will address these deficiencies and provide a means of economic growth while not placing any burden on the public purse.”

RF noted in its press statement that it will raise the $150 million on behalf of the BAA over 18 to 24 months through bond offerings that will be open to Bahamian investors. It added that those funds will go toward the development of airport facilities on Abaco, Exuma, Great Harbour Cay, Long Island and North Eleuthera.

“The improved facilities will significantly increase their passenger-handling capacity and improve air access to the islands, so they are better positioned for increased tourism,” the statement noted.

RF’s President and Chief Executive Officer Michael Anderson said in the statement that the bank is looking forward to assist in the expansion of the country’s airports, contending that they will be a catalyst for the country’s recovery from Hurricane Dorian and the COVID-19 pandemic.

RF stated it will raise the funding for the airports according to their construction schedules.

According to the statement, the total expected cost for the developments is $130 million and $150 million, including loans from the Inter-American Development Bank (IDB).

RF Vice President and head of Investment Banking Division Jim Wilson said this transaction marks a major milestone for the regional investment bank, which was involved in the 2019 bond offering to raise more than $134 million for the Nassau Airport Development Company.

“We are excited to bring a deal of this size to market for Bahamian investors that will also help to boost the country’s economic recovery,” Wilson said.

“RF is especially pleased to participate in a project that will have such a significant impact on tourism. With the planned renovations, the Family Islands will be well-poised for the anticipated increase in demand once the COVID-19 vaccine becomes more widely available.”

Cargill also said in the statement that a special purpose company (SPC) will be created that will license the operation of the airports to a management company, similar to the model used by the Nassau Airport Development Company.

Cargill told Guardian Business that there have already been several positive offers from companies interested in managing the SPC.

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source https://thenassauguardian.com/rf-bank-trust-to-raise-150-mil-to-fund-family-island-airports/