Government to auction EC$5 million bond to citizens

by Linda Straker

• Bonds will be auctioned from 31 October to 21 November
• Assigned on a first come first serve format for ECSE countries
• Initial retail auctioning bond will be part of an ECCB pilot project

Finance Minister Dennis Cornwall has announced that the government will be auctioning an EC$5 million retail bond on the Eastern Caribbean Securities Exchange (ECSE) as part of a partnership with the Eastern Caribbean Central Bank (ECCB) aimed at encouraging citizens to invest instead of growing their savings at commercial and indigenous financial institutions.

Cornwall explained that this initial retail auctioning bond will be part of a pilot project of the ECCB that also involves St Kitts and Nevis. “We are one of two pilots; St Kitts and Nevis being the other one,” he said during a news conference to announce the terms and conditions of the bonds as well as the date and time period they will be auctioned.

The finance minister said that such an initiative is important because it will provide citizens with an opportunity to invest. “Our government recognises that it’s simply not enough to tell people that they must save, we must give them the tools and, more importantly, the opportunity to develop financial literacy and to grow their wealth,” he said.

The bonds will be auctioned from 31 October to 21 November, and they will be assigned on a first come, first serve format for ECSE countries. The brokers will be those already approved by the Eastern Caribbean Securities Exchange that provide their services for the Regional Government Securities Market.

The minimum investment will be EC$500, and the maximum will be EC$50,000. All applicants must pre-register via a portal on the Ministry of Finance Website, and the broker for each island will then contact the applicant during the due diligence process. The 2-year government-backed bond offers a fixed annual interest rate of 4.25% with semi-annual payments in May and November of each year.

Mike Sylvester, Permanent Secretary in the Ministry of Finance, said the bonds are meant for households and not financial institutions such as banks and credit unions. “It’s for ordinary folks, ordinary families to be able to start that investment journey and to be able to invest in safe and secure investments,” he said.

He further explained that the initiative is not for the government to raise financing, but it’s an opportunity for empowering people. A separate prospectus for the EC$5 million bond will be published separately from the prospectus which provides information about the auctions of the government’s treasury bills and bonds through the Eastern Caribbean Securities Exchange scheduled for 2025.

According to Grenada’s 2025 prospectus on the exchange, the government plans to raise EC$60 million through 91-day Treasury Bills and EC$45 million through 365-day Treasury bills at different dates during February, May, August, September, October and December.

So far, most of the auctions have been oversubscribed. The EC$15 million Treasury Bill auctioned by the Regional Government Securities Market on 2 September was oversubscribed and raised EC$5 million more than the targeted amount.