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Barbados’ debt a tiny slice

SHAWN CUMBERBATCH, [email protected]

Barbados’ debt a tiny slice

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BARBADOS HAD ONE of the tiniest pieces of the regional bond market pie as about US$29.76 billion worth was issued in the first quarter of this year.

But despite continued improvements in Latin American and the Caribbean this year, a new report is cautioning that “the external environment remains challenging and the credit quality of some of the region’s borrowers has raised investors’ concerns”.

All of this information is captured in the Capital Flows To Latin America And The Caribbean: Quarter One 2016 report issued by the United Nations Economic Commission For Latin America And The Caribbean’s (ECLAC) Washington Office.

“Heightened market volatility in the early part of the first quarter made issuance difficult for even the best rated issuers, but a strong rally in March made for better issuance conditions,” the report stated.

“Total Latin America and the Caribbean debt issuance reached US$29.76 billion in the first quarter of 2016, compared to US$30.54 billion in the same period in 2015, three per cent lower. But it was a big improvement from the US$18.10 billion issued in the whole second half of 2015.”

Reporting on last year’s performance, ECLAC said Mexico had the largest share of bond issuances – sovereign and corporate combined – in 2015, followed by Chile and Brazil.

“It was the first time ever that Brazil was not included in the top two. Mexico, Chile and Brazil issued (sovereign and corporate combined) US$30.4 billion, US$7.7 billion and US$7.2 billion, respectively. Issuances from the top three countries account for 57 per cent of the total [Latin America and the Caribbean] issuance in 2015,” said the report.

The report said Barbados’ share of this Latin America and the Caribbean debt issued last year was about 0.40 per cent. Jamaica’s share was 3.67 per cent. Barbados’ amount was marginally larger than El Salvador’s (0.38 per cent), and Paraguay’s (0.35 per cent).

“Some of the largest issuances in 2015 came from sovereigns and quasi-sovereigns. Sovereigns, quasi-sovereigns and development banks accounted for 71 per cent of the total amount issued in 2015. According to market participants, in 2015, particularly in the second half of the year, there was little interest in getting too ‘corporate credit risk intensive’,” the report added. (SC)