Dominica Government to issue securities on Regional Government Securities Market

first_img 13 Views   no discussions Share LocalNews Dominica Government to issue securities on Regional Government Securities Market by: – February 22, 2012 Share Sharing is caring!center_img Tweet Share Flag of DominicaOn 24 February 2012, the Government of Dominica will be the sixth OECS Government to issue securities on the Regional Government Securities Market (RGSM). The Government will be issue a 91-day Treasury bill of $15 million for the purpose of financing part of their operational budget and to refinance existing debt at a lower cost. The maximum rate offered on the Treasury bill will be 6 per cent.The RGSM was established in 2002 by the Monetary Council of the Eastern Caribbean Central Bank (ECCB) as part of its thrust to develop money and capital markets in the Eastern Caribbean Currency Union (ECCU). The specific objectives of the RGSM are to:a. To raise short and long term capital at the lowest possible cost;b. To provide investment opportunities for residents; andc. To develop money and capital markets in the Eastern Caribbean.Since the inception of the RGSM, five of the eight member Governments of the ECCU have utilised the market to meet their financing needs. These included St Kitts and Nevis (2002), Grenada (2003), St Vincent and the Grenadines (2003), Saint Lucia (2004) and Antigua and Barbuda (2006). To date a total of 263 auctions have been held on the RGSM with Governments raising a total of $5.2 billion. The Governments have saved an estimated EC$33 million through the use of this facility. In addition, the Governments have been able to reduce the risk of their debt portfolios by widening the investor base and broadening the maturity structure. Residents of the ECCU have also benefitted from the advent of the RGSM through the opportunity to invest in higher yielding assets. Investors have also been able to reduce their exposure to risk by diversifying their assets across a wider selection of instruments and Governments.Investors in Dominica and across the region can participate in the auction through one of ten licensed brokers authorised to participate in the auction. Yields on these securities will not be subject to any tax, duty or levy by ECCU Governments.The Government of Dominica is expected to benefit from the usage of the RGSM through the reduction in the cost of funding of its operations and the enhancement in its ability to manage its debt portfolio. This will benefit the current fiscal situation by reducing debt service costs. The Government of Dominica has the lowest debt service ratio of the six independent countries in the currency union. The debt service to revenue ratio for Dominica was 9.74 per cent as at December 2010 for which comparable data are available.The Government has undertaken a promotional campaign in collaboration with its lead broker, the National Bank of Dominica, in Dominica and in Saint Lucia, St Vincent and the Grenadines and through a video conference with brokers in Anguilla, Antigua and Barbuda and St Kitts and Nevis.Further information on the specific terms of the Treasury bill issue and the licensed broker dealers can be obtained from the approved prospectus that is available from the Ministry of Finance or on the following websites:(i) www.ecseonline.comPress ReleaseGovernment Information Servicelast_img read more