20th August 2012, St. John’s Antigua- In an effort to close the budgetary shortfall, the Government has re-launched its Treasury Bill programme – this time borrowing a total of $35 million from individual investors.
On Tuesday, it will be seeking to borrow $10 million, in its third T-bill issuance this year.
“This is a re-launch of our Treasury Bill programme having had a T-bill programme previously in 2006,” explained debt manager for the government, Nadia Spencer-Henry.
Between the hours of 9 am and 12 pm, investors can contact the two government brokers, Antigua Commercial Bank (ACB) and the Antigua & Barbuda Investment Bank (ABIB), to make bids.
The T-bills, which will mature in 91 days, carry a maximum interest rate of six per cent. Investors must have at least $5,000 to invest and must make a bid on the interest rate they are willing to accept.
“It’s really a competitive auction bid process,” Spencer-Henry said. “Your broker will put in the bid and the bid favours the person with the lowest interest rate.”
The government issued 180-day maturity T-bills previously in June and July, both of which were oversubscribed. It was seeking $10 million in June and received bids for $19.5 million, and in July the $5 million sought received bids for $7.1 million. In the event there is an oversubscription in any of the latest T-bill issues, the government is willing to accept up to an additional $5 million for each issue.
The next issuance will be on September 11, when $10 million of 180-day T-bills will be issued. That will complete the $35 million.
T-bills are short-term loans to governments for periods of less than a year to assist with countries’ cash flow management requirements. Instead of paying periodic interest, they are sold at a discount from their face value. Upon maturity, the investor receives the face value. Because they carry a guarantee that interest and principal will be paid on time, they are regarded as risk-free investments by investors who are usually financial institutions.
Additional information is available in the prospectus, which can be viewed or downloaded at www.antigua.gov.ag or www.ecseonline.com. Investors may also contact the ECSE at (869) 466-7192.