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Gov’t owes $150M

Government goes through backdoor to borrow from workers’ savings

 

THE cash-strapped DCC Government has gone through the backdoor to dip its fingers into workers’ savings after its initial attempts to borrow $150 million was rejected by the Solomon Islands National Provident Fund (SINPF) Board three weeks ago.

On Monday it succeeded in obtaining the $150 million through what it calls Domestic Development Bonds (DDB) Agreement which it signed with the SINPF Board.

The government has plans for a further $150 million as it runs out of steam to finance its priority projects and investments, according to a statement issued by the Office of the Prime Minister yesterday.

The statement said the Government and the NPF Board signed the Domestic Development Bonds Agreement on Monday.

SINPF Board Chairman and former Finance Minister, Peter Boyers, immediately issued a cheque to the value of $120 million to the Minister of Finance for the 1st series bond, the statement said.

“The remaining $30 million will be paid on 30 March 2017,” the statement said.

The public was kept at bay until now about the signing the agreement, which was conducted “in the presence of senior officials from the Ministry of Finance and Treasury, Solomon Islands National Provident Fund (SINPF) and the Governor of the Central Bank of Solomon Islands,” according to the statement.

Finance Minister, Hon Snyder Rini thanked the SINPF Board for taking the initiative to participate on the Domestic Development Bond issuance by the Government.

Mr Rini said the proceeds from the Domestic Development Bonds would be used by SIG to fund its priority projects and investments.

“SIG will use the money to co-finance the Undersea Cable Project and shares on Solomon Telekom Company Ltd and South Pacific Oil Ltd,” he said.

Minister Rini added that the signing of the Development Bond Agreement marks a new milestone for the Government in terms of the government domestic bond market development.

“Under this arrangement SIG issues Domestic Development Bonds worth $150 million to SINPF … in two series. The first series is a 15-year bullet $120 million face value bond with an interest rate of 6.5% per annum,” the statement said.

The second series is a 10-year amortising $30 million face value bond with a grace period of 5 years with interest only to be paid during the grace period.

The principal repayments and interest payments of the bonds will be paid bi- annually in the months of September and March during the bond term.

The Minister announced that SIG had plans in place to issue a further $150 million in Domestic Development bonds this year 2017.

This will be a public issue and the Minister encourages the SINPF and other interested stakeholders to participate.



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