The "gift of the NIF" Bond offering

[snatman]

Any idea as to the offer price and eps/dividend ratios?

NIF a gift to the country

Jun 26, 2018

GOVERNMENT’s highly anticipated Initial Public Offering (IPO) for its National Investment Fund (NIF), through a company formed to monetise some assets recovered from the CLICO bail out, will run from July 11 to August 8.

The announcement was made by Finance Minister Colm Imbert yesterday in Parliament.

The prospectus as a gift to keep on giving to the people of Trinidad and Tobago, from whom $23 billion in tax dollars was injected into the collapsed conglomerate.

The NIF will be founded with an assortment of shares pulled from various former portfolios of CLICO, with the majority coming from Republic Bank valued at $4.3 billion and representing 55 per cent of the Fund

[De Dragon]

Any idea as to the offer price and eps/dividend ratios?

NIF a gift to the country

Jun 26, 2018

GOVERNMENT’s highly anticipated Initial Public Offering (IPO) for its National Investment Fund (NIF), through a company formed to monetise some assets recovered from the CLICO bail out, will run from July 11 to August 8.

The announcement was made by Finance Minister Colm Imbert yesterday in Parliament.

The prospectus as a gift to keep on giving to the people of Trinidad and Tobago, from whom $23 billion in tax dollars was injected into the collapsed conglomerate.

The NIF will be founded with an assortment of shares pulled from various former portfolios of CLICO, with the majority coming from Republic Bank valued at $4.3 billion and representing 55 per cent of the Fund

Bonds are to be issued not shares. An Express article had 4.5% to 6.5% at maturity, but no offer pricing. Terms are from 5-15 years I believe.

[snatman]

Oh! Bonds. hmmm.

Ok well scratch that. Many stocks paying around 4% right now.

Any idea as to the offer price and eps/dividend ratios?

NIF a gift to the country

Jun 26, 2018

GOVERNMENT’s highly anticipated Initial Public Offering (IPO) for its National Investment Fund (NIF), through a company formed to monetise some assets recovered from the CLICO bail out, will run from July 11 to August 8.

The announcement was made by Finance Minister Colm Imbert yesterday in Parliament.

The prospectus as a gift to keep on giving to the people of Trinidad and Tobago, from whom $23 billion in tax dollars was injected into the collapsed conglomerate.

The NIF will be founded with an assortment of shares pulled from various former portfolios of CLICO, with the majority coming from Republic Bank valued at $4.3 billion and representing 55 per cent of the Fund

Bonds are to be issued not shares. An Express article had 4.5% to 6.5% at maturity, but no offer pricing. Terms are from 5-15 years I believe.

[The_Honourable]

Imbert slams Kamla over NIF comments

Unpatriotic



Childish, fast, loose with her language, ridiculous and absurd.

That’s how acting Prime Minister and Finance Minister Colm Imbert yesterday described the actions of Opposition Leader Kamla Persad-Bissessar, who on Monday at a public meeting in Fyzabad claimed that Government’s National Investment Fund (NIF) is a Ponzi scheme and urged the population not to invest in NIF bonds.

But speaking at yesterday’s post-Cabinet press briefing, Imbert said in the 2018 national budget he made it clear that in order to meet our expenditure targets, they would rely upon the recovery of Clico’s assets using the NIF to generate capital revenue of $4 billion.

Without the $4 billion, Imbert said, it would be difficult for Government to meet its expenditure for 2018, which includes payments of salaries, pensions and basic goods and services.

“For reasons best known to herself, the Opposition Leader has tried to undermine the national budget, because she is bad mouthing the NIF that is going to be launched on July 15.”

He said if Persad-Bissessar’s propaganda campaign against the NIF works in a small way, “it can undermine the budget and the ability of the country to operate.”

Imbert said Persad-Bissessar’s statement was highly irresponsible, reprehensible and “disturbs the country’s equilibrium and poisons the mind of the little people” from benefiting from this tremendous opportunity.

“She was very fast and loose with her language. The very idea of referring to the NIF bonds as a Ponzi scheme is absurd. I would even say it is childish coming from the Leader of the Opposition. Childish and unpatriotic. Ridiculous... dangerous assertions...baseless, groundless, irrational statements coming out of the Leader of the Opposition.”

Imbert said anyone who is familiar with a Ponzi scheme would know it is a form of fraud.

“It’s an illusion. In a Ponzi scheme, you trick investors into investing into an imaginary product. You don’t have the money to repay them.”

Imbert said the NIF would own $8 billion in assets but was only offering $4 billion in bonds, which he said was a gift to the nation.

“So it has $4 billion in reserves. The only way the Leader of the Opposition’s assertion could possibly be true is if $4 billion just disappears from Republic Bank’s balance sheet.”

He said anyone who invests in the NIF would get a guaranteed return.

On Wednesday, Imbert said the Caribbean Credit Rating Agency gave the NIF bonds a double A investment rating. (See page A18)

Imbert said while Persad-Bissessar tried to paint the NIF in a bad light, she had offered no suggestions as to what could have been done to the Clico assets.

In response last evening however, Persad-Bissessar maintained that the NIF “is an ill-conceived, vague, deceptive Ponzi-like scheme being piloted by an equally vague and deceptive and incompetent Government”.

Persad-Bissessar called on Imbert to address the ten NIF concerns she raised. She also questioned why Government was borrowing from the public by way of bonds instead of selling shares to the public as promised and asked if Imbert had calculated the profits of the companies placed in the NIF over the life of the bonds.

Source: http://www.guardian.co.tt/business/2018 ... npatriotic

[The_Honourable]

Young: NIF not for the 'one per cent'



Communications Minister Stuart Young says the sale of bonds through the National Investment Fund (NIF) was not for the elite of the society and will not be manipulated like the First Citizens Bank (FCB) initial public offering (IPO) in 2013.

He was contributing to debate on Monday night on the Corporation Tax (Amendment) Bill in the House of Representatives to allow bonds, profits and interest from the NIF to be tax free.

He said with the FCB IPO under the former administration certain people manipulated the process, found loopholes and benefited at the expense of others.

"This NIF is designed for that not to happen. This NIF is designed to make sure that what they call the one per cent or what they call the elite and what they like to call as those who want to get the crown jewels of Trinidad and Tobago cannot get their hands on it."

He said it was not for the PNM but for the people of TT. Young added with a minimum investment of $1,000 people can purchase bonds and no financial institution or bank was offering a four per cent interest rate on $1,000.

The NIF was announced in the Budget last year, and will be underpinned by over 42 million Republic Financial Holding Ltd shares, worth $4 billion or 26 percent of Republic’s market capitalisation. The government acquired these shares as part of debt repayment from Clico Investment Bank, currently in liquidation.

Source: https://newsday.co.tt/2018/06/26/young- ... -per-cent/

[The_Honourable]

NIF bonds from $1,000 starting July 11

High interest tax-free bonds in the new National Investment Fund Holding Company Limited (NIFHCL) are priced from $1,000 and will be available between July 11 and August 8, Finance Minister Colm Imbert announced in Parliament on Tuesday as he piloted amendments to the Corporation Tax Act.

The amendments to the legislation exempt payment of corporation tax on the profits of the NIFHCL and interest payable on bonds issued by the company.

NIFHCL was formed recently as a vehicle to monetise assets transferred to Government from CL Financial (CLF) and its subsidiaries. This is in order for Government to recover funds owed from its $23 billion bailout of Clico after the insurance giant’s 2009 collapse.

The Government expects to raise $4 billion through NIFHCL’s portfolio which is worth $8 billion and is targetting big companies as well as individuals for the bonds.

“Even though things have improved, Trinidad and Tobago is still in a position where core revenues might be $40 billion and the Budget is $50 billion, so we’re still short $10 billion,” Imbert said.

“This $4 billion from NIFCHL will go a long way towards dealing with the fiscal deficit but if the NIFHCL project is unsuccessful, we will have a significant deficit for 2018.”

Shares obtained by Government as a result of the recovery of debt from CLF subsidiaries will form part of NIFHCL’s portfolio along with Government’s shares in Trinidad Generation Unlimited (TGU).

Imbert detailed the size and value of shares, with Republic Finance Holdings the largest at $4 billion and making up 55 per cent of the portfolio. All shares in NIFHCL’s portfolio will be transferred at market value.

Submissions have been made to the T&T Securities and Exchange Commission (TTSEC) to register NIFHCL. Its board comprises senior public servants.

Draft submissions of a prospectus offering fixed income asset-backed corporate bonds has also been made to the TTSEC. The bonds will be listed on the T&T Stock Exchange (TTSE).

Imbert said the bonds are backed by assets which are primarily listed companies and the interest rates are one per cent above Government borrowing rates. He said the fixed income asset-backed corporate bond “will be a unique instrument being marketed on Trinidad and Tobago’s capital market.”

The bonds, which can be purchased for $1,000 or in multiples of $1,000, are tradeable on the TTSE. They will be offered in three tranches with high interest—five years (4.5 per cent), 12 years (5.7 per cent) and 20 years (6.6 per cent )

Ernst and Young and FCB’s Brokerage Advisory Services have been engaged to help market the bonds.

On why bonds were chosen, Imbert said Government and its consultancy services reviewed the “technical underpinnings” of issuance of units or shares by a fund or by a company and their capacity to raise the appropriate amount of funds.

“From market soundings, it was determined neither a fund issuing units nor a company issuing shares could generate the $4 billion through a public offering given restrictions governing the structuring of portfolios within the institutional sector, including pension funds and life insurance companies.

“It was agreed an asset-backed corporate bond with appropriate tenors and coupons would be adequate to meet the varying investor requirements of the individual, corporate and institutional sector,” he said.

Opposition MP Dr Bhoe Tewarie asked if the market had the appetite for the venture and if the $4 billion could be raised. Noting $2 billion worth of liquidity already in the system, he said Government’s plan was easier said than done.

“I’m not sure the Unit Trust will have appetite for this or NIB will have $1 billion to invest in it, so will this be up to private corporations and individuals to put up the $4 billion?” he asked.

Source: http://www.guardian.co.tt/business/2018 ... ng-july-11

[The_Honourable]

NIF bond issue gets high rating

Regional rating agency Caribbean Information and Credit Ratings Services Limited (CariCRIS) has assigned initial credit ratings of CariAA on the regional rating scale and ttAA on the national scale to the proposed $4 billion debt issue of the National Investment Fund Holding Company Limited (NIF).

In a release yesterday, the agency said the ratings, which are of investment grade quality, indicate that the level of creditworthiness of this debt obligation is high.

“Notwithstanding the absence of an explicit Government guarantee for the bond, our ratings include a one-notch upgrade for the high likelihood of support for moral and economic reasons from the Government of the Republic of Trinidad and Tobago, should this be required,” CariCRIS said.

The agency assigned a stable outlook for the ratings “based on our expectations that over the next 12-15 months, the net dividend payments from the underlying assets of the NIF will be more than adequate to meet the coupon payments that will come due on bond during the period.”

CariCRIS said the ratings of the NIF are supported by the high asset quality of its underlying assets, which “lends to stable and reliable cash flows throughout the life of the bond and also provide adequate debt servicing capacity.”

The agency added: “Debt service coverage, inclusive of the sinking fund balance, remains comfortably above one for the life of the bond, indicative of a comfortable cushion for the NIF in meeting its total debt obligations (interest and principal).

“These ratings’ strengths are tempered by the discretionary nature of the NIF’s cash flows which are primarily sourced from dividends, as well as a high level of concentration risk given that 88.5 per cent of its earnings are derived from two entities, though this risk, to a large extent, is mitigated by the strong and healthy financial performance of both companies, as well as their history of strong dividend payments.

“The risk of possibly having to refinance the two tranches of the bond at higher interest rates also tempers the ratings.”

Source: http://www.guardian.co.tt/business/2018 ... igh-rating

[The_Honourable]

The National Investment Fund is launching its first public offering soon, but what exactly is it? Asha Javeed has the breakdown.

[Redman]

So some one tell me how a fixed income instrument that is priced to yield less than the long term inflation rate(7+%) is a gift...??

I would stay away.

[88sins]

So some one tell me how a fixed income instrument that is priced to yield less than the long term inflation rate(7+%) is a gift...??

I would stay away.

clown inbutt would label you unpatriotic for this remark

[Redman]

Making an investment decision based on patriotism....is a poor choice.

Facts is facts.

KPB is talking tripe-and he rightly waded into her.


if inflation rises-the bonds are a bigger WFT.
if we enter a deflationary spiral-the value of the assets backing the bonds-deflate...

If we have a devaluation-bonds are screwed-while the equity assets will hedge pretty well....with 0 impact on the value of the bonds-having 3X the coverage for a $1000 bond....is the same as 4X....the bond is worth $1000.

An equity backed bond opens the owner to both types of risk-without having to disclose it as such.

[De Dragon]

Making an investment decision based on patriotism....is a poor choice.

Facts is facts.

KPB is talking tripe-and he rightly waded into her.


if inflation rises-the bonds are a bigger WFT.
if we enter a deflationary spiral-the value of the assets backing the bonds-deflate...

If we have a devaluation-bonds are screwed-while the equity assets will hedge pretty well....with 0 impact on the value of the bonds-having 3X the coverage for a $1000 bond....is the same as 4X....the bond is worth $1000.

An equity backed bond opens the owner to both types of risk-without having to disclose it as such.

Just can't help yourself eh? That is not the same thing you're basically saying? That it isn't a sensible investment decision? Yes, hers is couched in incendiary and exaggerated language, but aren't you the one always spewing the opinion about politicians and expectations?

[Redman]

No it's not the same thing.
Ponzi scheme does not apply.

If you can't see that it's pointless saying anything else.

[De Dragon]

No it's not the same thing.
Ponzi scheme does not apply.

If you can't see that it's pointless saying anything else.

I just said that you and KPB, much as you loathe that comparison are saying the same thing. Hers is political stirring of the base of course. I agree that it is frequently pointless saying anything to you many times.

[SR]

If this is what is needed to pay salaries for 2018 then what is to be done to pay salaries in 2019?? There is no long term solutions being put in place

[Dizzy28]

If this is what is needed to pay salaries for 2018 then what is to be done to pay salaries in 2019?? There is no long term solutions being put in place

Hope and Prayers...


Hope and prayers!!!!

[88sins]

Time for these politicians, from captain to cook, to take a 110% pay cut, & then they should continue by refunding the people of T&T the salaries they received under false pretenses.
cuz lewwe be real, they being paid to run a country's affairs & over the decades the only 2 things I seeing they running most often is they blasted mouth & endless racket

[Miktay]

Zoom go hate mih for stating thiz again...Asha Javeed......mmmmm....mmmm....m lol

National insurance iza ponzi scheme...but I dont agree with kamala on thiz one...

Are the bonds callable?

[The_Honourable]

How and where to buy? Bourse? West Indies Stock Brokers?

Will be my first time investing in stocks and bonds locally.

[sMASH]

If this is what is needed to pay salaries for 2018 then what is to be done to pay salaries in 2019?? There is no long term solutions being put in place

First stop, Venezuela; next stop, Haiti....

I think I've said this already.



It's not a ponzi scheme, but inflation does render it useless.

Not sure how the dividends pay outs gonna be, which would calculate into if u make a net plus or minus when compared to inflation.




And if it's really to pay salaries, what dividend will there be?



Ponzi WI wrong but patriotism is the stupidest factor to use to invest... Might be better off investing in something actually making money and use those profits to pay the salaries.

[88sins]

If this is what is needed to pay salaries for 2018 then what is to be done to pay salaries in 2019?? There is no long term solutions being put in place

First stop, Venezuela; next stop, Haiti....

I think I've said this already.



1-It's not a ponzi scheme, but inflation does render it useless.

Not sure how the dividends pay outs gonna be, which would calculate into if u make a net plus or minus when compared to inflation.




2-And if it's really to pay salaries, what dividend will there be?



Ponzi WI wrong but patriotism is the stupidest factor to use to invest... Might be better off investing in something actually making money and use those profits to pay the salaries.

this is what ppl not getting, & just swallowing bs as spouted by a politician that literally couldn't care less about their well financial being.

1-From what I could tell, at a glance I expect core inflation over the next 5 years to negate any perceived growth by way of these bonds, so investors will at best in the long run break even. So that $45 on $1000 ppl thinking they gonna get may well be worth less than $20 if anything.

2-Most sensible institutions would issue bonds as a means to bring in capital, that will then be invested to generate revenue exceeding the value of bonds issued. IF it's to be utilized to pay salaries, WHERE they getting the $$$ from to pay out dividends/interest on these bonds & buy them back at the time of their maturity? Because last time I checked, paying salaries isn't a revenue generating expenditure with any gov't in this place. So as far as I concerned when that $$$ gone on paying salaries in 2018, that's the last they will see of it unless somebody can show me how they otherwise plan to use it to generate revenue in the long term. & they, where they getting revenue to pay 2019 salaries if oil & gas prices remain at their current levels & taxation revenue doesn't bring in enough? Issue more bonds? If that's the intended plan eventually the bonds won't be worth the paper & ink that was used to print them & they will default on investors.



All I would say in closing is this
Why not simply liquidate the assets acquired from the bailout, then levy on the companies to repay the outstanding balances if there are any? Wasn't that part of the bailout agreement? If not they made a very shiddy deal.
Local politicians have had a track record over the decades of proving they are at best incompetent when it comes to the matter of managing the financial matters of this country.
yuh really want them managing your investments & your money?

[PariaMan]

Maybe less than inflation but compared to the interest banks and other financial institutions offering it is much better

[88sins]

Maybe less than inflation but compared to the interest banks and other financial institutions offering it is much better

sounding like bait to see who they could ketch

[PariaMan]

Maybe less than inflation but compared to the interest banks and other financial institutions offering it is much better

sounding like bait to see who they could ketch

Once people have a choice they will probably take the one paying higher interest. Makes sense. Does not understand the bait context

[sMASH]

It sounds good, like herbal life..

[rspann]

Imbert say is ah good deal, why allyuh fighting it down so? Allyuh not patriotic at all.

[Redman]

Zoom go hate mih for stating thiz again...Asha Javeed......mmmmm....mmmm....m lol

National insurance iza ponzi scheme...but I dont agree with kamala on thiz one...

Are the bonds callable?

NIF as the issuer...would call them only if the outlook for the dividend stream is strong.Or interest rates are moving down.
So the holders would own the bond as long as it's disadvantageous to the bond holder.....i.e. A good deal for the issuer.

[rspann]

In short, they want a loan from the citizens .

[sMASH]

is like a sou-sou... they taking the first hand, and then they 'bonded' them selves to give us the next hands. but, the reason why they want to run the sou-sou is that they say they aint have no money now, and nothing will change to say that they will have money in the future, when time to give the other hands.

but, really, by that time, the south high way might be complete to funds will ease up there, oil prices will have remained a lot higher so money from that, the property tax, and traffic violation revenue streams should set up a prettey penny.

[snatman]

These days I'm buying up as much NCBFG as I can. I Expect at least a 20% bump once the GHL situation is finalised. What are your thoughts on that?

Sold out of JMMB after buying from since it was @ 35 cents a couple years ago!

Making an investment decision based on patriotism....is a poor choice.

Facts is facts.

KPB is talking tripe-and he rightly waded into her.


if inflation rises-the bonds are a bigger WFT.
if we enter a deflationary spiral-the value of the assets backing the bonds-deflate...

If we have a devaluation-bonds are screwed-while the equity assets will hedge pretty well....with 0 impact on the value of the bonds-having 3X the coverage for a $1000 bond....is the same as 4X....the bond is worth $1000.

An equity backed bond opens the owner to both types of risk-without having to disclose it as such.