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Muddying waters- No promise of a quick resolution in US China Trade Talks Published: 14 September 2018

(Bloomberg) President Donald Trump damped hopes of a successful and timely outcome from proposed trade talks between the U.S. and China. In a tweet yesterday, he said that his officials “are under no pressure to make a deal,” a move seen as undercutting Treasury Secretary Steven Mnuchin who issued the invitation to Beijing. Chinese state media warned the nation shouldn’t expect a quick resolution as Trump has not changed his thinking. 

Oil rise Published: 12 September 2018

A barrel of West Texas Intermediate for October delivery was trading at $69.70 by 5:45 a.m. as crude held onto yesterday’s gains following yesterday’s U.S. inventory data that increased fears of a supply crunch. Russian Energy Minister Alexander Novak told reporters that the country could add as much as 300,000 barrels per day to production within a year, if needed, as output concerns increase ahead of U.S. sanctions on Iran kicking in on Nov. 4. 

Fed, ECB outlook Published: 12 September 2018

The futures markets shows the highest chance yet of two more hikes from the U.S. central bank this year, with the first seen as a near certainty at the Federal Reserve meeting later this month. In Europe, the press conference following the ECB’s monetary policy decision tomorrow may help investors decide on the timing of a rate hike, with traders betting on no move until end-2019, later than economists’ projections. Officials familiar with the ECB’s latest projections say forecasts for euro-area growth will be tweaked lower as trade tensions damp global demand.

 

Barbados to Begin Exchange Offers for Local Debt This Week Published: 11 September 2018

(Bloomberg) -- Govt of Barbados posts terms of debt restructuring offers for local currency debt on govt website.

* Institutional holders of Barbados dollar-denominated treasury bills, treasury notes, debentures, loans and bonds owned by the central govt and state-owned enterprises will begin receiving restructuring offers this week

* Creditors given until 5 p.m. on Sept. 28 to accept terms; new debt instruments to be issued by end of October

* Several restructured instruments to include a clause that would “allow for the capitalization of interest and the deferral of scheduled amortizations falling due over a two-year period following the occurrence of a major natural disaster”

* Govt says in a separate statement that holders of “outstanding US dollar-denominated commercial debt” will be “invited to participate in the comprehensive debt restructuring program in a separate and subsequent transaction”

Governement of Barbados make BBD Debt Exchange Offer Published: 10 September 2018

The Government of Barbados announced on Friday that it has launched an offer to exchange the vast majority of Barbados dollar-denominated debt owed by the Government of Barbados and certain public sector obligors for new debt instruments issued by the Government of Barbados. The launch of the exchange offer follows the Government’s 1 June 2018 announcement of its intention to seek a comprehensive restructuring of the country’s unsustainable debt burden.

In making its announcement, the Government confirmed that the following Barbados dollar-denominated instruments fall within the scope of the exchange offer (“Affected Debt”):  

  • Treasury Bills
  • Treasury Notes
  • Debentures
  • Loans and bonds owed by the Government
  • Loans and bonds owed by state-owned enterprises (SOEs) and other entities that receive transfers from the state budget
  • Certain arrears owed by the Government and its public sector

 Savings Bonds do not fall within the scope of the exchange offer and will therefore not be restructured.  All holders of the Affected Debt will shortly receive letters with full details of the exchange offer, together with participation instructions. The exchange offer will be open to holders of the affected debt until 5:00pm on Friday, 28 September 2018.

IMF Reaches $300 Million Staff-Level Agreement With Barbados Published: 07 September 2018

(Bloomberg) The government of Barbados has reached a deal of about $300 million with the International Monetary Fund as it seeks to restructure one of the world’s highest debt loads. The island nation would receive an initial tranche of about $50 million as soon as October after the IMF board approves the deal, Prime Minister Mia Mottley said Friday in a joint press conference in Bridgetown with the IMF’s Bert van Selm. Mottley took office in June and promptly announced plans to restructure the roughly $600 million in outstanding dollar bonds.

In the last decade, the economy of Barbados has been caught in a cycle of low growth, widening fiscal deficits and increasing debt Mottley said Friday in a joint press conference in Bridgetown with the IMF’s Bert van Selm. International reserves have fallen to about $240 million dollars, which is below reserve adequacy levels, while government debt has become unsustainable. The yield on nation’s dollar bonds maturing in 2035 have fallen to 13.49 percent from 15.95 percent on June 4, after the government announced its intentions to restructure.

Emerging Markets Update Published: 06 September 2018

(CNN Money) The current decline being experienced in Emerging Markets has its origin in Washington. The currencies of Emerging Markets such as the Argentine Peso, Brazillian Real and South African Rand plunged as the US Federal Reserve steadily raised interest rates and President Donald Trump's trade crackdown added fury to the fire. Economists are saying that the trouble could spread, infecting other emerging markets and even Wallstreet, similar to what happened two decades ago during the Asian Financial Crisis. "There is a fear of contagion, similar to 1997-1998," said Michael Arone, chief investment strategist at State Street Global Advisors. 

That has already started to happen. Indonesia's stock market plunged nearly 4% on Wednesday. India's rupee recently tumbled to a record low against the US dollar and Brazil's real is also down sharply. The iShares MSCI Emerging Markets ETF(EEM) has slumped 11% this year, trading near a 14-month low. China's Shanghai Composite has tumbled 18%, while the Turkish lira has crashed by nearly half against the USD and last week Argentina increased its interest rate to 60%. 

Petrotrin Oil Refining Assets to Be Offered to Oil Workers Union Published: 04 September 2018

(Bloomberg) Trinidad and Tobago Prime Minister Keith Rowley delivered a national address on a change to state-owned oil and gas company Petrotrin, a transcript of which was released by his office Monday. He stated that closing Point-a-Pierre refinery is the “only commercially sound and viable option and that refining assets will be placed in separate companies for opportunity attention. He also stated that the Oilfields Workers’ Trade Union “will be given the first option to own and operate it on the most favorable terms". However, OWTU President Ancel Roget, Have expressed that the union has no intentions of owning the refinery. The President of the union stated that "they are patriots and that the refinery belongs to the people, it does not belong in the hands of a private owner, even if that owner is the union”. 

Emerging Market Assets falls as USD Rises Published: 04 September 2018

(Bloomberg) Emerging-market assets can’t catch a break, even though the most vulnerable countries have attempted to protect their currencies, the rising US dollar continues to influence their decline. MSCI Inc.’s index of currencies dropped for a fifth time in six days, putting the gauge on course for the lowest close in more than a year. The rand extended declines after data showed the economy entered a recession in the second quarter. The LIRA also fell due to concerns that the Turkish central bank will disappoint at its rate meeting next week, despite their promise on Monday to reshape the country's monetary policy stance. Argentine bonds reversed earlier gains even after President Mauricio Macri’s announcement of emergency measures to stem the current crisis in the country. 

Meanwhile, the dollar extended its advance to a fourth day as U.S. President Donald Trump threatened to ramp up a trade dispute with China, with an announcement of tariffs on as much as $200 billion in additional Chinese products as soon as Thursday. With U.S. rates rising, investor worries over idiosyncratic risks in emerging markets have been deepening, including Argentina’s fiscal woes, Turkey’s twin deficits, Brazil’s contentious elections, and South Africa’s land-reform bill.

Billionaire O’Brien’s Digicel Is Said to Weigh Options on Debt Published: 30 August 2018

(Bloomberg)  Bondholders in Digicel Group Ltd. should expect the phone company to decide in the near future on how to address its $6.8 billion debt load amid an earnings slump, according to people with knowledge of the matter. Digicel’s notes rose.

Executives told investors on a call Thursday that the company is reviewing a number of options, including so-called liability management exercises at the Digicel parent company level, said the people, who asked not to be identified because the call was private. Chief Financial Officer Ray Leclercq said decisions may be made shortly. Borrowers can use liability management to refinance, repurchase or modify existing debt, often to either reduce or extend the obligations. A company spokesman declined to comment.

The carrier founded by Irish billionaire Denis O’Brien said Wednesday that Leclercq will leave in September after a year in the post. Digicel also reported a decline in first fiscal quarter earnings, according to a report reviewed by Bloomberg News.

O’Brien has used high-yield debt to turn his mobile-phone carrier into a global operation with customers spread from El Salvador to Vanuatu. Investors have grown increasingly concerned after the company shelved a planned share sale in New York that was in part designed to pay down debt more than two years ago.

Digicel bonds were among the biggest gainers in the U.S. high-yield market on Thursday afternoon in New York. Its $2 billion notes due September 2020 added 4.4 cents on the dollar to 71.25 cents, according to Trace bond trading data. The debt’s retreat before today had pushed their yield to more than 30 percent. The April 2022 notes advanced 5.35 cents to 62.85 cents.