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FRIDAY, OCTOBER 7, 2022
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Bahamas told: ‘Rev the engine’ after new Moody’s downgrade By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE BAHAMAS was last night urged to “move more urgently to rev the engine” after Moody’s again downgraded the country’s sovereign creditworthiness over fears its access to borrowing is being squeezed. The credit rating agency, in slashing The Bahamas’ long-term issuer and senior unsecured ratings to ‘B1’ from ‘Ba3’, cited the “higher degree of government liquidity risk” as the main justification for its actions. This, Moody’s explained, stems directly from the elevated borrowing (interest) costs
• Action taken over financing access fears • Domestic investors must come through • Further ‘junk’ status drop ‘fairly sizeable’ that The Bahamas would have to pay to access bond financing on the international capital markets given the perceive greater risk in lending to this nation. The Ministry of Finance, responding to Moody’s action, hinted that the
latest downgrade was motivated by concerns that are not warranted. Referring to the Government’s borrowing plan for the 2022-2023 fiscal year, it argued that the document clearly stated the Government is aiming to avoid the global bond markets over
the next nine months due to the adverse high interest environment it would face. “Their concern at the moment is that elevated external borrowing costs, if experienced over an extended period of time, could lead to more limited financing options thus increasing government liquidity risk,” the Ministry of Finance said of Moody’s, before pointing out that it plans to seek its deficit financing from domestic investors/lenders and multinational institutions such as the Inter-American Development Bank (IDB) which tend to offer cheaper credit facilities.
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Atlantis: COVID rebound to ‘absorb’ BPL hit to $30m bill By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A SENIOR Atlantis executive yesterday voiced optimism that Bahamas Power & Light’s (BPL) massive fuel charge hikes will not slowdown the postCOVID tourism rebound “by itself” despite “the risk of eroding profits”. Vaughn Roberts, senior vice-president of government affairs and special projects, told Tribune Business that in the aftermath of BPL’s announcement the priority must be to diversify away from fossil fuel use with the Paradise Island mega resort
ATLANTIS RESORT AND CASINO typically facing a $30m annual electricity bill. With Atlantis presently progressing towards pre-COVID profit levels, he added that the rolling series of quarterly fuel charge increases that
BPL has unveiled for the next 11 months will not take The Bahamas into uncharted territory as this has been in the 20 cents per kilowatt hour (kWh) range before.
Alfred Sears KC, minister of works and public utilities, sought to highlight that same point yesterday when he told the House of Assembly that the BPL fuel charge’s scheduled peak of 27.6 cents per kWh between May and August 2023 will be just two cents higher than the 25-cent mark recorded when oil prices peaked in 2010. However, Mr Roberts said electricity costs were just one part of the inputs that impact the tourism industry’s competitiveness against rival Caribbean and other destinations. While the Davis administration has sought to
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Banks must ‘clear runway’ on high loan delinquencies By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE Central Bank’s governor yesterday agreed that commercial institutions must “focus on clearing the runway a lot more for new lending” by tackling loan delinquencies that exceed Caribbean and international norms. John Rolle, addressing a forum staged by The Bahamas Think Tank, said comparisons between the level of non-performing bank loans in The Bahamas
and those elsewhere in the region, the US and Canada “underscores the distance we have to go in getting the delinquency ratios in our banking sector lower than they were in 2008”. Non-performing bank loans, on which borrowers are 90 days or more past due, stood at $451.4m or 8.4 percent of total outstanding credit at end-August 2022. And further data unveiled by Mr Rolle revealed that Bahamian commercial bank lending to the private sector has contracted in every year
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Bahamas ‘may never be ready’ for exchange control elimination • Governor: Nation must ‘mature’, make tough reforms • Central Bank waives premium on Gov’t overseas bonds • Nation not facing ‘sovereign debt distress’, he asserts By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Central Bank’s governor yesterday warned The Bahamas “may never be ready” for the total elimination of exchange controls, adding: “I’d like to get to the Indy 500 but some of us aren’t even on Carmichael Road.” John Rolle, answering questions at a forum staged by The Bahamas Think Tank, said reaching that position was unlikely “until we mature and face up to the difficult financial reforms we
need to embrace”. He added that the level of “sophistication” in Bahamian financial markets and the economy will also need to be significantly enhanced. “It’s not on the immediate horizon,” he replied, when asked about the prospects for completely eliminating The Bahamas’ exchange control regime. “It’s not as straightforward as throwing a switch. What we try to emphasise is that behind the system is a framework to maintain the stability of the currency.
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Extend Dorian tax breaks so Abaco hits ‘full throttle’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ABACO’S business and civic leaders yesterday united to plead with the Davis administration for an up to two-year extension of the island’s Dorian tax breaks so it can come “back to full economic throttle”. Daphne DegregoryMiaoulis, Abaco’s Chamber of Commerce president, said the Government’s only response to their calls to-date was a letter from
the Ministry of Finance “requesting empirical data to justify our request”. She added: “The only data we have been able to confirm is 30 percent of homeowners have not met the requirement to have power connected, which means they have not been able to repair their homes... We are exactly nine weeks away from December 1, and no knows what is going to happen. “Will all concessions be removed? Will some
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