Verbal battle over Credit Suisse escalates
The angry war of words between Minister of Finance Chris Sinckler and Opposition Leader Mia Mottley over the servicing of an approximately $88 million loan from Swiss bank Credit Suisse continues, with the latest salvo coming from Sinckler.
At a Barbados Labour Party (BLP) meeting on June 28, Mottley claimed that Government had failed to repay the approximately $88 million loan on the due date of June 18.
In a Ministerial Statement on Tuesday, Sinckler denied the charge, accusing the BLP leader of telling a “horrible untruth” and making a “dangerous and irresponsible” claim that gave the impression that Barbados had defaulted on the payment for servicing the loan.
Armed with a signed document bearing the signatures of top executives of Credit Suisse, he said the “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.”
Mottley dismissed the statement as “verbal gymnastics and contortions”, and accused the Minister of “hiding behind allegations of default that were never made”.
Sinckler lashed at Mottley today for her retort, describing it as “unnecessary, reckless and designed to deliberately damage the impeccable reputation of Barbados” in regard to the country’s management of external debt obligations.
“I completely deprecate the insistence of Miss Mottley in deliberately creating the impression in the minds of unsuspecting local and international observers that Barbados has in some way reneged on its obligations to international creditors.
“Indeed, what is especially worrisome is that even in the face of irrefutable correspondence from the very creditors themselves, to whom Barbados is indebted, that the country has met all of its obligations on time and as required under the loan contract, the Leader of the Opposition still continues to try to insist that Barbados has done something other than it is legally obligated to do,” he said.
In responding to the Ministerial Statement, Mottley had questioned whether the terms and conditions of the loan had been secretly altered. The Minister denied that this was possible, saying Mottley ought to have known better.
“Miss Mottley further knows – or perhaps doesn’t – that any material alterations to the official and original terms of any loan contract between a sovereign country and its creditors to the extent that introduces new payment terms or conditions, constitutes a direct default or technical default as so classified by international capital markets and the international rating agencies.
“It is therefore absolutely impossible for any Government of Barbados to surreptitiously alter the original terms and conditions of any loan, so as to permit it to break the original terms and pay less on previously agreed terms, and worse yet, to inveigle a major international bank to accompany it in such mischief, as the arranger of a major syndicated loan involving varied investors,” the Minister contended.
Furthermore, Sinckler said, with the recent report by the Central Bank of Barbados that there were $1 billion in international reserves, repaying Credit Suisse was never an issue.
“No introduction of any new terms in the loan agreement was required or necessary, as evidenced by the latest Central Bank of Barbados report on the economy, with nearly $1 billion dollars in international reserves. Payment of our external obligations was never in question, then or now,” he said.