More opportunities for regional Investment

Investors have the opportunity to invest in the governments of Antigua and Barbuda and St. Vincent and the Grenadines monthly 91-day treasury bills as well as the upcoming August bond issues of the Governments of St Vincent and the Grenadines and Saint Lucia.

The Governments of St. Vincent and the Grenadines intend to auction a 10-year XCD 40.0m bond on August 16 2006 and Saint Lucia a 10-year XCD 50.0m bond on August 29, 2006. Bidding starts on the day preceding the auction date.{{more}}

To date $1.436 billion from 65 security issues (54 treasury bills, 3 treasury notes and 8 bonds) has been raised on the RGSM by the five issuing Governments: Antigua and Barbuda, Grenada, St Kitts and Nevis, Saint Lucia and St. Vincent and the Grenadines. The interest obtained by the Participating Governments ranged from 3.90 to 6.5 per cent for treasury bills, 5.5 to 8.0 per cent for treasury notes, and 6.00 to 8.00 per cent for bonds. The duration of the securities issued were 91 days and 365 days for treasury bills, 5 years for treasury notes, and 6, 7 and 10 years for bonds.

Overall the RGSM has contributed to a reduction in the cost of borrowing for the participating governments. It is expected that as more ECCU member governments use the RGSM to source capital for their countries’ development needs, there will be greater opportunities for them to access cheaper debt financing and by extension reduce the debt burden to current and future generations of ECCU citizens. The RGSM also provides households and firms with alternate investment opportunities to meet short and long term financial goals. While commercial banks have continued to dominate the investor profile, accounting for over 70 per cent of total subscriptions, investors throughout the Currency Union have equal opportunity to invest in upcoming government securities issued on the RGSM, which are all tax free.

The Regional Government Securities Market (RGSM) was launched on November 25, 2002 as part of a wider initiative to improve the money and capital markets in the Eastern Caribbean. The primary objective of the RGSM is to provide an avenue for both governments and investors to capitalise on the single financial space by being able to trade in securities outside of their domicile country without the concern of exchange rate risk.