Payments on Principal Put Off to 2030
Going forward, government will make repayments on the principal. It will, however, have to make five soft bullet payments leading up to the maturity of the bond in 2034. Those payments are expected to be made as of 2030.
Prime Minister Dean Barrow
“For the entire life of the bond all we will pay is interest, interest which has gone down by a sliver from the twenty-six million dollars a year. That’s all we will pay until we get to 2030 when you’re supposed to pay the principal in five, what they call soft bullets, from 2030 through to 2034. The arrangement now whereby all you deal with is the soft bullet arrangement is far more market regular, market normal, if I can use that phrase. And so what you do, in 2030 when the soft bullets start becoming due you merely refinance the principal. Now it doesn’t mean you get rid of the principal. Unkind people will sometimes say that I promise more than I deliver, which is not strictly true. But in this case, I don’t think I ever promised anybody that the principal would simply disappear. I promised that we would solve this thing and in terms of what has happened, there is no doubt in my mind that this is a solution. There’s no question of that kind of our hitting a wall in terms of the reserves, in terms of the payments once you combined the amortization with the interest payments. That is over and done with. You pay only the coupon, as I said, until 2030 and when you get to 2030 you simply refinance the principal on what hopefully will be even better terms.”
We’ll have more details of the Super Bond restructuring coming up later in this newscast.