TCI Seeks Credit Rating To Replace UK Loan
by Mike Godfrey, Lowtax.net, Washington
26 May, 2014
Turks and Caicos Islands Premier Washington Misick has briefed islanders on efforts to secure the jurisdiction's first sovereign credit rating.
He said the TCI is now entering a crucial 18-month period during which the country will need to reduce its debt and seek creditors to support the remaining debt from February 2016, when the current UK loan facility is to expire.
Standard & Poor's has been appointed to issue TCI's first sovereign credit rating this summer. After the publication of this credit rating, the TCI Government hopes to rebuild its reputation in international finance markets.
The UK-guaranteed debt currently stands at USD121m, but the Government hopes to reduce this to USD80-100m by 2016. The UK's loan guarantee was offered on considerably more favorable terms than the islands could otherwise have obtained, saving millions of dollars of interest over the term of the loan between 2011 and 2016.
Misick said: "Our proposed revenue measures will be used to ensure that the TCI runs a budget surplus, which in addition to helping to pay down the debt, demonstrates to the global finance community that the TCI is a well governed, responsible nation that they can lend to with confidence. That is why we very much welcome the recent joint approach of the Government and the Opposition in tackling our debts promptly and prudently."
"We owe it to our children and our children's children to secure the very best refinancing package that we can for these islands. We must continue upon our course of prudent financial stewardship for our future generations. If we do not we will have to pay higher rates which cost all of us millions of dollars in additional interest each and every year, these monies being lost to our public spending plans for years to come."
The loan financing followed the British Government's intervention in the TCI in 2009 following reports of "systemic corruption." Following the UK's intervention the islands' tax regime has been overhauled, but plans to introduce a value-added tax were ditched.
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