WITH GOVERNMENT COMMITTED to avoiding the international market for additional net borrowing until 2012, analysts suggest this could open the door to further activity on the domestic market.

And, should activity increase on the local capital market front, dominant player Barbados National Bank (BNB) is welcoming competition as other commercial banks and financial institutions jockey for the pole position in this developing sector.

"Within recent times there has been increased competition in the capital market. . . and we would expect that as the market gets more sophisticated and as borrowers become more active you will probably see an increase in the number of capital market transactions," said Robert LeHunte, BNB's managing director and chief executive officer.

He noted, however, that any increase in local borrowing over and above the present level would provide opportunity for increased capital market transactions that "could also have an impact on local liquidity resulting in a further inching up of interest rates".

Last week FirstCaribbean International Bank announced it was strengthening its capital market team by appointing four bankers with "significant expertise" in the field.

Since 2004, BNB has raised in excess of $700 million through capital market deals, most notably securing more than $270 million for a number of Government agencies through bond issues.

RBTT has also been active in this area, having raised capital for Barbados Port Inc., the new Coast Guard station, and the Whitepark Judicial Centre currently under construction – and its president and chief executive officer, John Beale, said RBTT recently raised financing for the Transport Board terminal expansion.

While Beale did not expect to see any significant increase in domestic borrowing, he said his bank welcomed Government debt. (CH)