Govt repays millions in bond scheme

Investors in BOSS, the government’s optional savings scheme bonds, have received payouts totalling millions of dollars, the Central Bank of Barbados revealed on Monday.

Dr Kevin Greenidge, Governor of the Central Bank, disclosed during a press conference reviewing the economy for the first half of the year that total payouts for the original BOSS bonds amounted to $4.5 million.

The BOSS initiative, launched in 2020, has become a key part of the government fiscal strategy, providing both investment opportunities for citizens and funding for government projects. It followed the Mottley administration’s shock default in 2018 in which domestic investors in government paper were forced to take a haircut.

“We started the BOSS back in July 2020. Everyone would have received that principle that would have been paid into the BOSS bond in July 2020. We have no reports of anyone not receiving,” Dr Greenidge said. He explained that the bonds mature four years from their issue date, with each tranche being redeemed at 18-month intervals.

Dr Greenidge encouraged investors to reinvest their returns: “With that new money, we have other BOSS bonds. You want to invest it in something. My advice is that persons were doing without it for four years, so now is the time to roll it back in. The other BOSS bonds are four-and-a-half per cent. So, I am hoping to see an increased demand.”

The Central Bank head revealed that $109 million in bonds have been sold in the current fiscal year to date, with about $19.8 million remaining available for investment.

BOSS+ bonds, which are sold at par value, offer a 4.5 per cent annual interest rate, paid in two instalments on February 28 and August 31. This interest is not subject to withholding tax. Investors have the option to redeem their bonds after 24 months, rather than waiting for full maturity. Prior to this, bonds would be traded on the secondary market or with another person.

Dr Greenidge stressed the scheme’s success: “We have redeemed for July, the payment of the principal, $4.5 million we paid out to individuals. It was $5 million on average.” (EJ)