Overseas company in talks with govt on new financing stream
An international firm is offering to help pull Barbados out of its current economic rut in the wake of the latest credit rating downgrade by the United States-based Standard and Poor’s.
Andrew Stewart, chairman of the stockbroking and investment management firm – Ravenscroft Limited – and his business partner Stuart Fordham, a bond trader, told the media today they were willing to help raise the necessary financing through the issuance of bonds.
The British nationals, who work along with international investors, said some of their global partners would be willing to purchase “large bonds” in any currency.
They insisted that there was no need for Government to turn to the International Monetary Fund (IMF) for assistance, adding that Barbados had the option of tapping “the international large bond market to raise substantial sum of money” and they would help to facilitate that process.
The other option “alongside a potential bond issue”, said Stewart, was for the island to continue to attract substantial foreign investments.
“We would be happy to put our reputation and I would personally be happy to put my money behind it as well. That is an option for them (Government) to take away, not for us to nitpick at what they are doing or what they are not doing,” said Stewart, adding that he was confident that investors would subscribe.
“In the event that they wish to do that, we feel that with our infrastructure and working together with our partners worldwide we would be able to issue a bond for a substantial sum of money.
“I do not think this country should be knocking on the door of the International Monetary Fund because I think it will end in tears and it would be substantially the worse option,” added Stewart.
He said he had so far “engaged” the Minister of Finance and other senior Government officials, as well as the Central Bank, at various levels “in social and formal meetings” prior to the S&P downgrade “and we have put together some ideas”.
“We are only here to help and if we were to be involved in this and if the Government were to do it we would be happy to work and advise the Barbados Government about what their options are and introduce them to some of the world’s [wealthiest] investors,” he said.
Adding that there was the availability of funds in the international market, Stewart said people would be willing to purchase the bonds given that the island had traditionally done well economically compared to other countries and was compliant with all international financial markets.
Both Stewart and Fordham insist their proposition was based purely on their love for the island, and had no ulterior motive.
Stewart, who has invested in a number of hotels, houses and restaurants in Barbados, said he would continue to personally invest in Barbados.
“We have seen issuance in the emerging market bond space of US$40 billion in the year 2014. US$13 billion of that issuance was for the sovereign bond market. These borrowers that issued $13 billion worth of securities had similar ratings to Barbados. I am talking about the likes of Ethiopia, Kenya, Pakistan, the Ivory Coast and Jamaica. These bonds have come to the market in 2014, all in excess of $750 million to $2 billion,” said Fordham.
They said it was prudent that the Government make the move now given the current interest rates.
“We are in an interest rate environment where investors are hungry for yield and hungry for extra returns and, it is for that reason and for others, that I feel Barbados would be warmly received on the international capital markets and an issue would be heavily oversubscribed,” said Fordham, adding that once investors were adequately informed and the bonds issued the transaction could be completed “in a matter of a month”.
In relation to the latest downgrade, Stewart dismissed it saying that S&P “had an axe to grind”.