Government denies it defaulted on loan
Government today dismissed as a “horrible untruth”, an allegation by Opposition leader Mia Mottley that the country had defaulted on a multi-million dollar loan from the Swiss bank Credit Suisse.
Minister of Finance and Economic Affairs Chris Sinckler, in a Ministerial Statement to Parliament, also said Mottley’s claim was “dangerous and irresponsible” and had the potential to undermine investor confidence in the island.
Sinckler told legislators that the Barbados Labour Party (BLP) leader made the “very unwarrented accusation” at a party meeting on Sunday June 28, 2015 at Spooner’s Hill, St Michael, that the $88 million loan had remained unpaid one day after it was due.
He said the claim effectively gave the world the impression that Barbados had defaulted on the payment for the servicing of the loan, which was due to be made on June 18, 2015.
“[The accusation] has the potential to undermine the confidence of current and prospective investors in our country, damage the impeccable reputation of Barbados in the international financial markets and derail the hard fought gains which, as a country, we have made over the years,” the Minister said.
Sinckler claimed that in the days immediately following the allegation, and as recently as this week, officials at both the Central Bank of Barbados and the Ministry of Finance and Economic Affairs, including himself, have had to take calls querying the veracity of Mottley’s statement.
In contradicting the Opposition Leader, Sinckler indicated that on June 18 2015, under the terms and conditions of the loan contract with Credit Suisse, “Government, in fulfillment of its obligations, made the payment as scheduled in the amount of BDS $41.23 million, representing interest $20.6 million and amortization $20.63 million, to the various holders of the facility”.
He added that Government had also met its full commitment to Barclays De Zoete Wedde ahead of the July 1, 2015 due date.
“It is therefore a horrible untruth that Barbados has defaulted on any of its obligations for this or any other loan.,” said Sinckler, who produced a letter signed by the principals of Credit Suisse LLC, as proof that Government had met its debt obligations to its creditors.
“[Given] the very volatile conditions in the international financial markets occasioned, as they are, by the much publicized credit defaults in Greece and Puerto Rico, these very reckless and unnecessary statements by Mottley could not be more untimely, dangerous and irresponsible,” he added.
The Minister explained that the Credit Suisse loan, approved on November 26 last year, was intended for Barbados to finance the 2014-15 deficit, shore up the international reserves at the Central Bank and revive the economy through a 19 month fiscal consolidation programme.