| Gov. Wetherell announces $260 million loan details | | Print | |
| Thursday, 17 March 2011 17:33 | |||
 The U.K.’s $260 million loan guarantee is now in place to refinance the Turks and Caicos Islands’ government debt and cover deficits over the next two years, His Excellency the Gov. Gordon Wetherell has announced. “It does not provide any money to reverse previous spending cuts or fund significant new expenditure,” he said. “Instead we need to use the breathing space it provides to bring revenue and spending into line.” At the heart of the loan package is a bridge loan of $170 million to be replaced by a bond, syndicated bank loan or other funding in the next few months, the governor said. The loan has an interest rate of .25 percent over the London Interbank Offered Rate (LIBOR), the daily reference rate based on rates at which banks borrow in the interbank lending market. Most of that loan will repay a consolidated loan that was at 5 percent above LIBOR and to pay a large backlog of unpaid non-financial creditors, the governor said. A five-year term loan of $30 million at .75 percent over LIBOR is available to repay more expensive government debts. Also, a five-year revolving bank facility of $60 million at .25 percent over LIBOR will fund projected deficits over the next two years. Most of the government debt was incurred by the former elected government by what the governor called fiscal maladministration, compounded by the economic downturn. Righting the government’s finances is a requirement of the Foreign and Commonwealth Office for setting elections for the return of government control to local officials. The governor restated measures that are coming in the budget that begins April 1 to “set us on the road to fiscal surplus:”
“I recognize that not everyone will be comfortable with the short-term impact of some of these decisions,” Wetherell said. “But we are set firmly on a clear course to establishing a strong financial foundation on which TCI and future governments can build with confidence as the economy recovers.”
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