Halkitis: Strong interest in Bahamas bonds

The government is in wait-and-see mode on international bond market financing, Minister of Economic Affairs Michael Halkitis told Latin Finance this week, explaining that while interest is strong from the market, the government is waiting for more favorable borrowing costs.

The publication Latin Finance spoke to Halkitis during his visit to Santiago, Chile for the Inter-American Development Bank’s annual meetings.

Halkitis told the publication of “significant interest” in a new bond issuance from investors.

“Investors like The Bahamas’ credit and encourage us to go to the market,” Halkitis told Latin Finance.

“We are interested, but are watching. We are looking at interest rates and when they seem right, we will make a decision.”

Halkitis told Latin Finance that despite the investor appetite, the country is currently focused on improving its economic indicators.

The country’s most recent market foray was last November, when it repurchased $216 million of its $2.43 billion in outstanding international bonds. The buyback included $141 million in 2028 bonds, $50.2 million 2029 notes, and $27.3 million in bonds with maturities between 2032 and 2038.

“He said the country has done a great deal of work on bringing down the fiscal deficit and righting the debt-GDP ratio,” the Latin Finance article said.

“The fiscal deficit reached the equivalent of 13.1 percent of GDP [gross domestic product] at the height of the pandemic, when the country locked down and tourism disappeared.

“For the fiscal year that ended in June 2024, the fiscal deficit had fallen to 1.3 percent of GDP. Halkitis is optimistic about getting this down further.”

Halkitis told the publication that part of the government’s financial burden is from state-owned enterprises that continue to be subsidized.

Halkitis told Latin Finance that the government is taking aggressive steps to achieve a debt-to-GDP ratio of about 50 percent by the year 2030 or 2031.

He told them that a healthy inflow of tourism-related foreign direct investment should give the country’s gross domestic product “a bump up this year”.

“We are confident that, barring any natural disaster or any sort of pandemic event, that we are on the right track,” he said.