Finance Ministry denies holding secret bond issue meetings

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The Ministry of Finance has flatly denied reports aired on VSB News last night that Government held secret meetings with bankers to float a new bond issue to raise cash.

In response to media queries regarding the “Investor Meeting” press release sent out last Friday a spokeswoman said: “Assertions in response to the release by certain sectors are unfounded and false.”

“It was clearly stated that last week’s release was sent as part of the Government of Bermuda’s efforts to be transparent, signalling that discussions were being held.

“As a further note, false reports and misstatements in the media do no one any good and are counter to ethical behaviours,” she added.

Shadow Minister of Finance Bob Richards meanwhile issued a statement yesterday on the initial statement released by Government announcing “its intention to get together with money lenders for help in meeting its budget needs this year”.

“Just what the Government’s budget needs are is a big question.

“Suffice to say they involve Bermuda borrowing more money to keep things running and, in the process, deepening the debt hole it has dug,” said Mr Richards.

He also referred back to the Premier and Finance Minister’s budget statement in February that “her government would be running a current account deficit of $95.9 million”. “We disagreed with that estimate, believing it would run closer to $255.2 million,” said Mr Richards.

“Interestingly, in the same Budget statement, the Finance Minister raised Bermuda’s debt ceiling to $1.45 billion from $1.2 billion, an increase of $250 million. What Bermuda needs to know now is how much money is the Government asking for.

“We believe the Government should tell Bermuda how it plans to pay down its debt.

“We ask that question because the Government’s debt reduction plan may well influence the interest Bermuda has to pay on the money it intends to borrow,” he said.

“If the Government does not put forward a plausible debt reduction plan, lenders will more than likely set their interest charges higher. Bermuda already pays approximately $115 million a year servicing its billion-dollar-plus debt, that’s more than $300,000 a day.

“When you wonder why Government cuts programmes such as Mirrors or reduces its commitment to charities such as the Sunshine League, look no further than the cost of its massive debt.

Mr Richards described the “debt situation is a major issue for all Bermuda” and a “major challenge going forward”.

“The Government needs to be clear with the people what it is asking for from international money lenders because it will have a lot to do with the future of this Island.” he said.

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Published Jun 20, 2012 at 8:50 am (Updated Jun 20, 2012 at 8:50 am)

Finance Ministry denies holding secret bond issue meetings

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