Suriname to issue $500 million in bonds for the first time

PARAMARIBO – Suriname wants to collect US$ 500 million on the international capital market by issuing bonds, the Central Bank and the Finance Ministry announced yesterday. The State wants to obtain funds to participate in the gold deals with Newmont and Iamgold, and part of the money is to be used for investments by state oil company Staatsolie.

The State will hire a bank to assist with the selling of the bonds, and banks can currently bid on this commission. A spokesperson of the Central Bank says the bonds should be sold before the end of the year.

“This would be the first time Suriname issues bonds on the international market,” says economics professor Anthony Caram. He thinks this action is legal, as the law on the state’s debts provides sufficient room for the government to borrow. Yet Caram also notes the projects in the gold sector must yield sufficient funds and extra revenues to pay the loans in the future. “As of yet, that is difficult to ascertain”, says Caram.

The government also wants to invest the proceeds in Staatsolie. The financial authorities claim the oil company cannot borrow on its own under such favorable circumstances, even with its good international reputation. “Investors do not consider the company’s rating as such, but the country’s,” says Staatsolie’s financial manager Iwan Poerschke. “We will never get more favorable loans than the country.”

In 2010, Staatsolie issued bonds on the national market, and Poerschke says the proceeds exceeded expectations. Yet he adds the company will not be able to gather the funds needed for planned investments locally. Proeschke refuses to say which portion of the US$ 500 million is intended for Staatsolie.

The Central Bank and Finance Minister Adelien Wijnerman declined further comment to de Ware Tijd.

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