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Bajans snap up bonds

Natasha Beckles

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DESPITE SHAKEN?INVESTOR?CONFIDENCE from the unresolved CLICO?and British American Insurance debacles, Barbadians committed $40 million in three days to a Government-guaranteed bank investment.  
BARBADOS BUSINESS AUTHORITY has learnt that within 72 hours of BNB?Finance & Trust’s launching its $100 million bond for the Barbados Agricultural Management Company, Barbadians starved for safe investments snapped up nearly half of the bonds.
Tessa Pickering, manager of BNB Finance & Trust, said the response was “significant”, with $40 million received in commitments and actual funds.
BNB Finance & Trust is the arranger of the bond, which went public on March 1.
In an interview on Friday, she said a “steady stream” of people had been requesting information and the interest rates, six per cent on the five-year bond and 6.5 per cent on the eight-year issue, were a drawing card.
Pickering said the vast majority of those making inquiries were individuals, although some institutional investors had also signalled their interest.
Still nervous
She noted that generally, Barbadian investors were still nervous and even more conservative as a result of the still unresolved CLICO and British American Insurance Company Ltd fallout.
According to the banker, the adage “once bitten, twice shy” was holding true, noting that Barbadians were simply seeking safe investments.
Central Bank statistics at the end of last April show Barbadians had a total $8.9 billion in deposits in the island’s five commercial banks.
Pickering noted that Barbadians traditionally opted for investment vehicles like Government bonds and debentures, or buy shares and hold on to them.
Moreover, she said, potential investors “care about who the issuer is”.
“People feel more comfortable because this bond is Government-backed,” she explained.
The manager said BNB was using this opportunity to expand on what Barbadians already know about investing. Interest payments on the bond will be paid quarterly and the principal repaid on maturity in 2016 and 2019.
Another $60 million will be issued as a private placement through a United States dollar facility to a mix of institutional and sophisticated individual investors.