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Government to raise one hundred and ninety-six million dollars for capital expenditure

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Contact: Shannon Lebourne


Tuesday, June 9, 2009 - Prime Minister and Minister for Finance Honourable Stephenson King, has received authorization to raise a sum not exceeding one hundred and ninety-six million dollars by the issue of savings bonds on the Regional Governments Securities Market.


Mr King presented the motion to the House of Assembly for consideration on Tuesday. He said the money will be used to finance capital and other expenditure and for debt refinancing by government.


“The proceeds of the one hundred and ninety-six million dollars ($196, 000, 000) that is being sought today Madam Speaker, will include a number of government programmes, among them being the reconstruction and rehabilitation of roads, the west coast road overlay, tourism marketing promotion and land acquisition—which for some time has been a major issue of government's inability to keep abreast of payment for land acquisition. The funds raised will also be used for preliminary works on the new national hospital, for which a contract was recently signed and construction started,” said the prime minister.


Mr. King said based on the financing requirements contained in the 2009/2010 budget the actual amount needed to be raised through bonds is one hundred and forty-six million dollars. The fifty million dollar difference between the estimates and the resolution, he explained, represents a roll-over in bonds, which were issued in 2004. Mr King says these bonds are scheduled to mature in July this year.


“The reason for us at this time seeking to refinance the fifty million dollars is because at the time when the money was sought in 2004, there was no sinking fund established, so no arrangements were made to set aside on a periodical basis the amounts needed and necessary upon maturity of fifty million dollar bond issue. As the fifty million dollar bond issue matures in July, it is necessary for us to refinance it because of the absence of a sinking fund,” said the Prime Minister and Minister for Finance Hon. Stephenson King.


Mr. King says the government of Saint Lucia will use its best endeavours to obtain the most competitive interest rates when the bonds are placed on the market.  He says it is critical to keep borrowing at a minimal rate in light of the global economic downturn.

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