The Trinidad and Tobago government says it has closed out a US$800 million sovereign bond sale on the United States market, drawing demand that oversubscribed the offering by roughly 400 per cent.
The Ministry of Finance said that this is the strongest reception the oil rich twin island republic has had for a bond issue since it first went to the benchmark market in 2013. The ministry said that the Notes, issued on July 9, priced with a coupon of 6.20 per cent and came in with a negative new issue concession, meaning investors did not need any extra pricing sweetener to buy in. It said the result reflects the depth of investor appetite and confidence in the country’s credit standing, and has effectively repriced Trinidad and Tobago’s yield curve.
The ministry said that the deal followed a two-day roadshow led by Finance Minister Davendranath Tancoo, Minister of Energy and Energy Affairs Dr Roodal Moonilal, and Central Bank Governor Larry Howai, who presented the country’s credit story to prospective buyers.
It said more than 150 investors from the United States, United Kingdom, Europe and the Caribbean took part, with strong participation from local institutional investors as well, a turnout the Ministry says broadens the country’s international investor base and supports market liquidity going forward.
In January Tancoo led an international deal roadshow in New York covering the country’s macroeconomic outlook, fiscal consolidation strategy and debt management plans, and in April the ministry held its first-ever non-deal roadshow, in Washington, ‘to keep investors updated on fiscal performance and energy and non-energy sector developments outside the context of an active bond sale.
‘Notably, the new bond carries a 12-year tenor, longer than the 10-year structure most sovereigns typically use, and the first time Trinidad and Tobago has issued on that timeline internationally. Officials describe the longer maturity as a deliberate move to better match the country’s debt profile as part of a longer-term financing strategy, one that still came with pricing better than bonds issued over the past decade. ‘
Tancoo said the outcome shows renewed international confidence in the country, tying it to the government’s push to grow the non-energy economy alongside a renewed energy sector.
Key terms of the transaction: the Rule 144A/Reg S notes are rated BBB- by S and P and Ba2 by Moody’s, mature on July 16, 2038, and will settle July 16, 2026.
Proceeds are earmarked to repay the country’s 4.50 per cent notes due in August 2026, with the remainder going toward general budgetary purposes.
The bond is listed on the Luxembourg Stock Exchange and was jointly led by Citigroup Global Markets and J.P. Morgan Securities as bookrunners, with ACERO Capital serving as the government’s financial advisor.
Among the deal’s other highlights cited by the ministry incudes it ‘achieving the lowest spread over U.S. Treasuries for a 10-year-equivalent issuance in the country’s history, priced a new 12-year benchmark below larger Latin American peers, compressed pricing by 32.5 basis points from initial price talk to launch, and extended the average life of the government’s external debt maturity profile’.