Regional Bidders Dominate Government T-bill Issue

Details

Economy

Wednesday, 22 August 2012 02:30

By caribarena news

Antigua St. John's - Government's latest tranche of Treasury Bills have been oversubscribed, once again, with the majority of bids coming from regional states.

Some $15 million was raised, $5 million more than expected for the 91-day T-bill issue that was auctioned on the Regional Government Securities Market (RGSM) using the Eastern Caribbean Securities Exchange.
 
Debt Manager Nadia Henry-Spencer said the majority of bids came from outside the country with interest from St. Vincent and the Grenadines, Dominica, St. Kitts & Nevis, and Anguilla.
 
A statement issued by the Ministry of Finance said seven licensed intermediaries placed a total of 18 bids, ranging between $5,000 and $5 million, with an aggregate value of $18.67 million.
 
A competitive uniform price auction methodology was used and the resulting discount rate was 5.00 per cent. The government accepted 13 bids for a value of $15 million, the statement added.
 
"What we're seeing now is more brokers coming on stream to auction," she explained. "This is due in part because they know of our T-bill auction because the latest news release went regional."
 

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This T-bill issue as well as the June tranche will mature at the end of this year.
 
Henry-Spencer said government is hoping that individuals who bought the two issues would want to re-invest after getting paid.
 
The funds raised would be used to refinance maturing RGSM securities and assist with the Government’s short-term cash flow management requirements, the Ministry of Finance has said.
 
Tuesday's auction coincides with a visit by a team from the International Monetary Fund (IMF) which is in 36-month Standby Arrangement with this country.
 
However, the debt manager said the two matters are not related.
 
The Antigua & Barbuda Government will next auction on September 11 for $10 million 180-day Treasury Bills.

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