CIG to cut proposed loan for bond pay-off
(CNS): The Cayman Islands Government has confirmed that it will meet the bond payment of US$312 million (approximately CI$261.3 million) that is due to be repaid on 24 November this year and may not need to borrow as much as previously anticipated to pay off that bond and still maintain its cash flow obligations. As government finances continue to look robust, the CIG has been cutting debt and is now looking at cutting the new loan it expected to take out to repay the bond.
Following enquiries by CNS, Financial Secretary Kenneth Jefferson said the repayment of the bond was not in question. However, while the Legislative Assembly approved additional government borrowing up to CI$153 million in 2017 to help with the repayment, it may now not need to borrow as much as appropriated.
The plan is for government to pay off the bond from a combination of a new loan and government’s own cash balances. But Jefferson said that while there is no uncertainty about the bond being repaid, the CIG has not decided the amount of the new borrowing it will take out or how much it will pay from the public purse.
“The precise split between any new borrowings in 2019 and the use of government’s existing cash balances to repay the bond in November 2019 hasn’t been finalised as yet,” the financial secretary told CNS.
The latest unaudited financial accounts from government covering the first six months of this year demonstrate that government’s once heavy debt has been reduced significantly. As of 30 June this year, the public debt balance stood at $407.1 million as a result of scheduled principal repayments being made.
But with another loan of around $25,000 also due to be repaid in less than a year and some $689.8 million in the government coffers, it will now be able to pay off the bond obligation without borrowing a substantial amount.
By this time next year, government debt could be less than half the current amount, a far cry from the peak debt of almost $800 million in 2010/11. Running up the borrowing bill was one of the fundamental reasons why the government at the time failed to comply with the Public Management and Finance Law and was banned for borrowing any more money by the UK.
However, when Marco Archer took up the position of finance minister in 2013 in the previous PPM-led government, he committed to repaying the debt at an aggressive pace. So far the current finance minister, Roy McTaggart, has maintained the same prudent fiscal approach, helped greatly by improved government revenues.
However, with economists warning that a potential global recession could be on the horizon, cutting the debt even more than originally anticipated could prove a smart move.
Category: Government Finance, Politics
Fix the damn dump!
An amazing achievement. Who are we going to blame for this world class achievement ?
To the non Caymanian posters. How does this fiscal position compare to your home country? I know there is no comparison. Cayman is simply the land of milk and honey. You must be so proud to live here. Caymanians will one day appreciate how lucky we are.
The dump is indeed our greatest achievement to date.
6:08 How true. My home country is deep in debt, crime is on the rise and good jobs are taken by other EU nationals. Cayman is paradise.
I am doing my part to integrate and be productive.
Funny, the PPM put us in this debt and then pat themselves on the back trying to get us out of it. You just cant make this stuff up!!!
7.01pm.I can’t make this stuff up, but you just did. Check the facts…it was UDP that created that debt not PPM.
It was CDP that took out the 10yr bond after reviewing the half-baked infrastructure horror show left from PPM, including Clifton Hunter and unfinished John Gray etc. Neither are blameless, but now they are in bed together, jockeying for the prize of being the best revisionists.
Given the fiscal disaster almost all of the worlds governments find themselves in this is actually really impressive. Well done CIG. Don’t relax though, this global bull run won’t last for ever…
Is the PPm also responsible for the overruns on Clifton Hunter High School and the hot mess at John Gray! Just asking?
I am sorry, but you cant call the longest bull run in the history of the world an accomplishment for government.
They are merely spectators taking credit for what private business has accomplished on the island.
Private business can only succeed if a government facilitates.
Try again.
and you still have the expat pension funds to fall back on, in case things really go south
In case you are being serious, pension funds aren’t anything to do with Government, there is no mandate for Government to access private pension accounts, nor any ability for the pension funds to invest into Cayman. The only direct relationship an expat might have with Government over pensions is if they were a civil servant, but even then they can transfer their benefits to another plan in their own country after 2 years of leaving the island.
The governments pension scam goes to extreme lengths to hold your pension hostage when you leave the Civil Service.
Simply world class and the envy of the world. Get used to it
lol
Well done PPM … can’t say enough about the fiscal improvements and the job you have done to hold the good ship steady. Not without fault but you are all doing a much needed and improved job compared to prior administrations. Thank you and may the Cayman Islands continue to be blessed.
I guarantee you from this accomplishment and how well government is performing on a financial level –
No matter what government does, you will have very unhappy CNS commenters with nothing better to do, than to criticize and blame government for this and for that …
No matter what good you do, you will be blamed or badly spoken about something. You will even have Caymanians who know you personally, behind your back negatively gossip on you …
These are the same ones you see walking in Camana Bay, going to movies and licking ice cream. From protesters to enjoyers of the fruit they were initially protesting against!
Sorry, but it is perfectly legitimate to point out when the government brags about its fiscal stewardship, that all they are doing is taxing us five hundred different ways as we go about our lives, and spending less than they take. It is a very simple thing to do which requires no effort, no risk, and no courage on their part. What would require those things is reducing the tax burden or spending on things that matter to everyone, not just the few who consider themselves entitled to government subsidy (largely businesses). I give these politicians no credit for good government finances. Civil servants do all the work. All the politicians have to do is choose not to make life better for people, watch the money roll in, decide what to blow 85% of it on and then put out a press release about how there’s 15% left and we should be thankful. Well, I’m not. I want the cost of living to be lower. If we had a plan to refinance the loan already, stick with the plan and make my groceries cheaper. That I would applaud.
In 1961, a great man and leader said: “Ask not what your country can do for you – ask what you can do for your country.”
What are your expectations for government? I expect them to maintain and improve the infrastructure, but most importantly protect our rights and individual liberties. I expect them to put forth and enforce legislation which protects our natural resources.
I don’t look toward CIG to make my life better — that has always been on me. You sound as if you might want more government to make things happen for you and yours. I want less government, to allow us all more personal freedoms.
Well 10.15 applaud this. The duty reduction on most items imported. Duty reduction on fuel. Removal of duty on certain food items.Whether or not your store manager, service station operator or utilities provider pass on these savings is another matter.You will have to complain to your landlord about your high rent, not Government .Now can I hear some applause for a job well done by this Administration.
A job well done is just as such, give credit where credit is due.
This again shows the fantastic financial management of the Unity government who are the greatest government in the history of the Cayman Islands. 8 more years for the Honorable Premier and his leadership team as we can not afford to loose them now!
lol
Shut up twins
Profligate PPM spending is the entire reason why there is any debt at all. Ten years later, we are going to have to roll forward 2/3 of the unpaid principal from this bond, via a new debt offering at worse terms. Wait for it…
Is this why the teachers couldn’t get their PROMISED raise in pay this September?
Yeah because they’re doing such a great job.