BAHAMAS · DEBT MARKETS
Key Facts
- The country Island nation east of Florida whose economy rests on tourism and cruise visitors.
- Why it matters Bahamian sovereign bonds are dollar bonds sold to investors in North America, Europe and beyond.
- Why now The offer closed 27 October, results came 28 October and settlement was expected 29 October.
- What happened The Government accepted US$170.6 million of old bonds and expects to redeem US$194.3 million more.
- What it means for you Holders of the remaining 6 percent 2028 and 9 percent 2029 notes should expect to be repaid early.
In Plain English
A tender offer is an invitation from a borrower to buy back its own bonds for cash at a fixed price. Holders decide whether to hand their bonds in, and the borrower decides how many it will take.
A coupon is the yearly interest a bond pays on its face value, so a 9 percent coupon pays US$90 a year on each US$1,000 bond. To redeem a bond is to repay it, in this case ahead of its due date.
The Bahamas has agreed to buy back US$170.6 million of its older US dollar bonds and expects to redeem another US$194.3 million, after selling a new US$1.1 billion bond. The Government announced the result on Wednesday 28 October, and payment to the investors who tendered was expected on Thursday 29 October.
The notes are payable in US dollars, and the Bahamian dollar is pegged one to one to the US dollar, so no currency conversion is involved. Four of the five old series pay coupons from 6 percent to 7.125 percent, below the 7.70 percent on the new notes, while the fifth pays 9 percent, and the Government has not said what the exchange saves in interest.
What Happened
The offer to purchase opened on Monday 19 October for five series of notes, and the Government’s statement put its expiry at 5 pm New York time on Tuesday 27 October. It depended on the Government closing a new global note issue large enough to fund the purchases, and the Ministry of Finance had announced that issue as complete by 23 October.
The new US$1.1 billion issue matures in 2039 and pays a 7.70 percent coupon. The Ministry of Finance said the yield tightened by 40 basis points (0.4 percentage points) from initial guidance and that orders peaked at 3.2 times the amount on offer.
What the Tender Results Show
The Government accepted every note tendered in the 6 percent 2028 series (US$38.425 million) and the 9 percent 2029 series (US$98.546 million). It also took US$6.601 million of the 7.125 percent 2038 notes and US$27.075 million of the 6.625 percent 2033 notes, just under a third of the US$85.069 million offered in that series.
No notes were accepted in the 6.95 percent series due 2029, and the statement gave no reason. The Government’s statement put the cash price of the accepted notes at about US$178.4 million before accrued interest, roughly US$7.8 million above face value.
About US$194.3 million of principal remains on the 6 percent notes due 2028 and the 9 percent notes due 2029. The Government expects to redeem both series in full as soon as reasonably practicable after settlement.
Where the New Money Goes
Three uses can be added up from the public record, namely the US$170.6 million tender, about US$194.3 million for the rest of the 2028 and 9 percent 2029 notes, and US$331.82 million to refinance Grand Bahama Power Company debts. On 14 October, Prime Minister Philip Davis told the House of Assembly that the last item covers a US$200 million syndicated loan used to acquire the utility plus US$131.8 million of its existing facilities, and that a bond issue would be sized to meet it.
Those three items add up to about US$697 million of the US$1.1 billion, and the Government has not said how it will use the remaining US$403 million or so. Dr Duane Sands, chairman of the opposition Free National Movement, has asked whether the Government will need fresh approval from Parliament if that balance adds to the national debt.
What It Means for You
The new notes mature in 2039 and pay 7.70 percent, a yield the Ministry of Finance said was more than 50 basis points below the country’s June 2025 issue despite a longer maturity. The Ministry cited a stronger credit profile, with Moody’s at Ba3 after an April upgrade and Fitch and S&P both at BB-, all with stable outlooks and all below investment grade.
The transaction has no direct bearing on travel, prices or entry rules for visitors from the United States. Its audience is holders of Bahamian bonds and Caribbean credit analysts, who will watch the early redemptions and any new borrowing resolution in Parliament; this guide to the key players in the Bahamian economy gives the background.
What Is Not Known
The statement does not say how the remaining US$403 million or so will be used, although an earlier Ministry statement spoke of refinancing international bond series and certain government and energy sector bank facilities. It also does not say how the early redemption of the 2028 and 9 percent 2029 notes will be paid for.
The Government has not quantified the net interest saving, and it gave no reason for taking none of the 6.95 percent notes due 2029. A 7.70 percent coupon on US$1.1 billion works out to about US$84.7 million a year in interest.
The Government has not announced a date for the early redemptions beyond saying they will come as soon as reasonably practicable after settlement. Whether Parliament must approve any use of the proceeds that adds to the national debt is also open.
Frequently Asked Questions
How much did the Bahamas buy back?
The Government accepted US$170.6 million of old bonds and expects to redeem US$194.3 million more. Settlement was expected on Thursday 29 October.
What are the new Bahamas bonds?
The new notes total US$1.1 billion, mature in 2039 and pay a 7.70 percent coupon. The Ministry of Finance said orders peaked at 3.2 times the amount offered.
Will the Bahamas repay its 2028 and 2029 bonds early?
The Government expects to redeem the rest of the 6 percent 2028 and 9 percent 2029 notes as soon as reasonably practicable after settlement. About US$194.3 million of principal is left on the two series.
Does this affect travel to the Bahamas?
No direct effect on travel, prices or entry rules for American visitors has been announced. The transaction concerns how the Government refinances its debt.
Sources: Ministry of Finance of The Bahamas, offer to purchase for cash five series of notes, 19 October 2026; Office of the Prime Minister, Philip Davis on the resolution to refinance Grand Bahama Energy Company and Grand Bahama Power Company obligations, 14 October 2026; Ministry of Finance investor relations, ratings page; Ministry of Finance investor relations, news and events, October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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