Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698844396219.pdf (Saint Vincent and the Grenadines)
GOVERNMENT OF ST. VINCENT AND THE GRENADINES DEBT PORTFOLIO REVIEW 2019 Prepared by: The Debt Management Unit Ministry of Finance and Economic Planning March 2020 The Government of St. Vincent and the Grenadines TABLE OF CONTENTS ACRONYMS ................................................................................................................................................ 5 i.
EXECUTIVE SUMMARY ............................................................................................................... 6 ii.

INTRODUCTION ............................................................................................................................. 8 3.

INSTUTIONAL FRAMEWORK .......................................................................................................... 9 4.
TRANSPARENCY AND ACCOUNTABILITY .................................................................................. 9 5.
PUBLIC DEBT PROFILE .............................................................................................................. 10 5.1 External Public Debt ......................................................................................................................... 11 5.1.1 Creditor Category ..................................................................................................................... 11 5.1.2 Creditor Composition ................................................................................................................ 12 5.1.3 Instrument type .......................................................................................................................... 13 5.1.4 Economic Sector ........................................................................................................................ 13 5.1.5 Currency Composition .............................................................................................................. 14 5.1.6 Interest Rate Structure .............................................................................................................. 15 5.1.7 External Disbursements ............................................................................................................ 16 5.2 Domestic Public Debt ....................................................................................................................... 17 5.2.1 Instrument Type ........................................................................................................................ 17 ............................................................................................................................................................ 17 5.2.2 Creditor Composition .......................................................................................................... 18 6.
CENTRAL GOVERNMENT DEBT ................................................................................................... 19 6.1 Securities issued during 2019 ........................................................................................................... 21 6.2 Regional Government Securities Market .......................................................................................... 22 6.3.
Central Government External Debt ................................................................................................. 24 6.3.1 Economic Sector ................................................................................................................. 24 6.3.2 Currency Composition ........................................................................................................ 25 2019 Debt Portfolio Review Produced by the Debt Management Unit 2 | P a g e The Government of St. Vincent and the Grenadines 6.4 Central Government Domestic Debt ................................................................................................ 26 6.4.1 Domestic Debt Instrument Type ................................................................................................ 26 6.4.2.
Domestic Debt by Creditor ....................................................................................................... 27 6.5.
Central Government Debt Service ................................................................................................... 28 6.5.1 External ..................................................................................................................................... 28 6.5.2 Domestic Debt Servicing ........................................................................................................... 28 7.0 PUBLIC CORPORATION DEBT..................................................................................................... 29 7.1 Public Corporation Debt by Borrower and Creditor Categories ....................................................... 29 7.2 Instrument Type ................................................................................................................................ 31 7.3 Debt Service ..................................................................................................................................... 32 Finance Administration Act (FAA) Cap 252.
.......................................................................................... 37 The Treasury Bills Act Cap 444 .............................................................................................................. 37 The Public Sector Investment Loan Act No.1 and No.
23 of 2019.......................................................... 37 The Caribbean Development Bank Loans Act Cap 89 ............................................................................ 37 Covers all loans from the CDB ................................................................................................................ 37 The International Financial Organizations Act Cap 100.......................................................................... 37 Authorizes the Minister of Finance to sign agreements with the World Bank and the International Monetary Fund 37 The Government Guarantee of Loans Act Cap 255 ................................................................................. 37 List of Tables Table 1: Composition of Public Debt as at Dec. 31 2019 and 2018……………………………………………10 Table 2: Total External Debt by Creditor Category ....................................................................... 11 Table 3: External Debt Outstanding by Creditor ........................................................................... 12 Table 4: External Debt by Instrument Type .................................................................................. 13 Table 5: External Debt outstanding by Economic Sector…………………………………………………………..12 Table 6: External Debt outstanding by Interest Rate Composition .............................................. 15 Table 7: Domestic Debt Outstanding by Instrument Type ........................................................... 18 2019 Debt Portfolio Review Produced by the Debt Management Unit 3 | P a g e The Government of St. Vincent and the Grenadines Table 8: Outstanding Treasury Bills on the RGSM as at December 31, 2019 ............................... 23 Table 9: Outstanding Notes on the RGSM as at December 31, 2019 ........................................... 23 Table 10: Outstanding Bonds Listed on the RGSM as at December 31, 2019 .............................. 23 Table 11: Composition of External Debt by Instruments
 ............................................................. 24 Table 12: Disbursements on External debt by Creditor and Sector ............................................. 16 Table 13: Composition of External Debt by Economic Sector ...................................................... 25 Table 14: Debt Raising Activity for 2019 ....................................................................................... 26 Table 15: Domestic Debt Outstanding by Creditor ....................................................................... 27 Table 16: External Debt Servicing ................................................................................................. 28 Table 17: Domestic Debt Servicing ............................................................................................... 29 Table 18: Public Corporations Debt by Borrower and Creditor .................................................... 30 Table 19: Public Corporation's Debt by Instrument Type and Creditor ....................................... 32 List of Charts Chart 1: External Debt by Categories ............................................................................................ 11 Chart 2 Domestic Debt by Categories ........................................................................................... 17 Chart 3: Treasury Bills Yields ......................................................................................................... 22 Chart 4: Central Government External Debt by Currency Composition ....................................... 25 Chart 5: Central Government Domestic Debt by Instrument ....................................................... 22 LIST OF APPENDICES Appendix I Appendix II Appendix III Appendix IV Appendix V Appendix VI Selected Public Debt Indicators 2009-2019 External Debt Disbursement by Creditor 2019 Composition of Total Public Debt 2007-2019 Debt to GDP Debt Service to Revenue Treasury Bills Average Rates 2009-2019 2019 Debt
 Portfolio Review Produced by the Debt Management Unit 4 | P a g e The Government of St. Vincent and the Grenadines ACRONYMS AFD ALBA ATM ATR BoSVG CDB CDF Agence Francaise de Developpment Bolivarian Alliance of the Americas Average Time to Maturity Average Time to Re-fixing Bank of St. Vincent and the Grenadines IBRD IDA IMF KWD LIAT International Bank for Reconstruction and Development International Development Association International Monetary Fund Kuwait Dinars Leeward Island Air Transport Caribbean Development Bank NIS National Insurance Services CARICOM Development Fund NPL National Properties Limited DMU Debt Management Unit OPEC Organization of Petroleum Exporting Countries CWSA Central Water and Sewerage Authority PDVSA Petroleos de Venezuela S.A DOD Disbursed Outstanding Debt RGSM Regional Government Securities Market EC Eastern Caribbean TECHVOC Technical Vocational ECCB EIB FAA Eastern Caribbean Central Bank UWI University of the West Indies European Investment Bank USD United States Dollar Finance Administration Act VINLEC St. Vincent and the Grenadines Electricity Services GOSVG Government of St. Vincent and the Grenadines GDP Gross Domestic Product IADC International Airport Development Company XCD XDR Eastern Caribbean Dollar Special Drawing Right 2019 Debt Portfolio Review Produced by the Debt Management Unit 5 | P a g e The Government of St. Vincent and the Grenadines i.
EXECUTIVE SUMMARY The Debt Portfolio Review aims to provide a detailed overview of the total public debt portfolio of St. Vincent and the Grenadines for the year 2019.

The Review compares the debt stock as at December 31, 2019 to that of 2018, categorizing the components into: - External1 and Domestic debt and further disaggregated by Central Government and Public Corporations2.

Furthermore, the review analyses the debt by creditor category, instrument type, currency composition and economic sector.
The interest rate structure and maturity profile of the Central Government’s debt portfolio were also analyzed to determine the scope of the risks associated with the portfolio.

The review also provides an overview of debt activities including new debt contracted and debt service during the year.

All analysis in the review was done in Eastern Caribbean dollars unless stated otherwise.

As at 31st December 2019, the total disbursed outstanding public debt stood at $1.67 billion or 75.2 percent of GDP.
Of this amount, total external debt stock accounted for $1.18 billion or 53.0 percent of GDP and total domestic debt stock amounted to $493.2 million or 22.2 percent of GDP.

Of the total public debt $1.50 billion or 67.6 percent of GDP is attributable to the Central Government with the remaining $168.3 million or 7.6 percent constituted Public Corporations debt.
Total external debt increased by 9.1 percent while total domestic debt decreased by 14.4 percent resulted in a marginal increase in total public debt of 0.9 percent.

Central Government’s debt increased by 7.0 percent while public corporation’s debt decreased by 33.3 percent.

The Public Corporations debt remains within the $300.0 million limit specified by the Government Guarantee of Loans Act.
The main drivers of the increase in external debt was issuances of $53.6 million in new securities to non-residents; disbursements of funds on new and existing projects such as the Fiscal Reform and Resilience Development Policy Credit Loan Facility; TECHVOC education and Training development; 1 Debt owed to creditors outside of St. Vincent and the Grenadines 2 Debt for which the Government has given an explicit guarantee 2019 Debt Portfolio Review Produced by the Debt Management Unit 6 | P a g e The Government of St. Vincent and the Grenadines UWI open campus; Disaster Vulnerability Reduction Project; and the Agricultural and Feeder Roads Project.
The decrease in domestic debt was as a result of reductions in the accounts payables and the overdraft facility; and the settlement in full of the National Properties Loan owed to the National Insurance Services which was guaranteed by Central Government.

During the year, Government successfully redeemed and reissued $28.0 million in maturing treasury bills on the RGSM on a monthly basis and issued $149.8 million in bonds and notes via a mixture of private placement and RGSM auctions.
Additionally, a total of $65.2 million in bullet bonds and notes were repaid.

The review of the Central Government’s debt servicing3 cost over the period showed that the cost of servicing the debt increased by 9.5 percent from $173.2 million in 2018 to $189.8 million in 2019.

Sinking Fund contributions increased by 45.7 percent from $22.2 million in 2018 to $32.4 million in 2019.
All Public Corporations/Government guaranteed institutions, with the exception of NPL, LIAT and UWI, met their debt servicing obligations as scheduled.

These debt obligations have been settled by the government.

The NPL loan has been re-financed via a debt-swap initiative and the UWI and LIAT loans are currently being serviced by the Government.
3 In keeping with international best practices, Sinking fund contributions were subtracted from debt servicing 2019 Debt Portfolio Review Produced by the Debt Management Unit 7 | P a g e The Government of St. Vincent and the Grenadines ii.

INTRODUCTION The annual review of the Public Debt Portfolio of the Government of St. Vincent and the Grenadines (GoSVG) is done to promote debt transparency.
The publication of this review is grounded in the government’s stated debt management objective enshrined in the Medium term Debt Management Strategy which seeks to: “Satisfy the financing needs of the public sector at minimum cost over the medium to long- term, in a prudent and sustainable manner thereby limiting the exchange rate risk and promoting the development of an efficient functioning money and capital market in the Eastern Caribbean Currency Union (ECCU)”.
The reporting period is the year ended 31st December 2019 and is compared with end of year data for 2018.

The report seeks to review all components of debt including but not limited to external and domestic debt; central government; and public corporations’ debt; and debt raising and RGSM activities.

The evolution of the debt by creditor category and composition, instrument type, economic sector and interest rate structure are also addressed.

The Public Sector Investment Programme Loan Act No.
1 and Act No.

23 of 2019 provided the authority for debt raising activities in the sum of $150.0 million whereas the Resolution of the Parliament passed in the House of Assembly on January 29, 2019 established the limit for the Overdraft.

All external borrowing in 2019 were authorised by existing legislation and therefore did not require additional legal authority.

The document is divided into seven (7) sections, including the Executive Summary.
The remainder of the document is organized as follows: Section II provides the introduction; and Section III presents the institutional framework that governs the debt management operation.

Section IV details the transparency and accountability framework.

Section V provides a detail general overview of the public debt profile and structure.

Section VI focuses on the structure of Central Government Debt and discusses the risk indicators in the context of the Medium-Term Debt Management Strategy.
Section VII deals with Public Corporations Debt.

The document then concludes with appendices mainly in graphical and tabular form showing selected debt indicators over the eleven-year period 2009 - 2019.

The Ministry of Finance records debt and generates 2019 Debt Portfolio Review Produced by the Debt Management Unit 8 | P a g e The Government of St. Vincent and the Grenadines reports using the Commonwealth Secretariat Debt Recording and Management System (CS- DRMS)4.

3.
3.

INSTUTIONAL FRAMEWORK The Ministry of Finance, Economic Planning, Sustainable Development and Information Technology is headed by the Minister of Finance and comprises several departments over which the Director General, Finance and Planning has administrative control.

Most debt management functions are centralized in the Cash, Debt, Investment Management Unit (CDIMU) of the Ministry of Finance and Economic Planning while others are undertaken by different departments.
In addition to performing debt management activities, the CDIMU provides policy advice on the overall debt management strategy of St. Vincent and the Grenadines.

4.

TRANSPARENCY AND ACCOUNTABILITY The Government has adopted a system for strengthening the institutional framework for transparency, accountability and monitoring of fiscal matters.

As a result, the fiscal position of the government is reported monthly to the Cabinet.
Additionally, the fiscal and debt positions are reported annually in the Government’s Estimates of Revenue and Expenditure and quarterly fiscal reports are available via the local media and the Government’s website.

The ECCB also conducts quarterly and annual economic and financial reviews, which are published across the region.

Article IV Country Surveillance Reviews conducted by the IMF are also published and are available on the government’s website and the Fund’s external website as well.
Further, efforts are being made to have the Audited Reports of the Government available on a timely basis.

The latest Audited Reports of the Government for the fiscal year 2013 were laid before the Parliament on January 29, 2019.
4 The CSDRMS software records detailed information on debt instruments and other variables including exchange rates variable interest rates bases, and select economic data 2019 Debt Portfolio Review Produced by the Debt Management Unit 9 | P a g e The Government of St. Vincent and the Grenadines The Ministry of Finance and Economic Planning seeks to establish a client-oriented environment conducive to the attainment of sustainable economic development and improvement of the quality of life of all citizens of St. Vincent and the Grenadines through sound economic management and the promotion of good governance.
The main objective of the Government is to maintain a stable and productive economy, with a focus on education and training, enhanced business competitiveness, further tax reductions, prudent debt management and fiscal consolidation.

5.

PUBLIC DEBT PROFILE TABLE 1: COMPOSITION OF PUBLIC DEBT As at December 31, 2019 the total disbursed outstanding public debt stood at $1.67 billion or 75.2 percent of GDP5, an increase of 0.9 percent from $1.66 billion.
Of this amount, Central Government debt accounted for $1.50 billion, or 67.6 percent of GDP, an increase of 7.0 percent when compared with the amount of $1.40 billion as at December 31, 2018.

The remaining $168.3 million, or 1.3 percent of GDP, is attributable to debt owed by Public Corporations.
Ext Central Gov't Dom Central Gov't Total Central Gov't Ext Public Corp Dom Public Corp Total Public Corp TOTAL DEBT 2019 $ million 1,038.5 465.0 1,503.5 140.1 28.2 168.3 1,671.8 % of GDP 46.7% 20.9% 67.6% 6.3% 1.3% 7.6% 75.2% 2018 change 899.9 504.8 1,404.7 180.5 71.6 252.2 1,656.9 15.4% -7.9% 7.0% -22.4% -60.6% -33.3% 0.9% 5.6% -2.1% 3.5% -1.9% -2.0% -3.9% 0.4% 41.1% Ext Central Gov't 23.0% Dom Central Gov't 64.1% Total Central Gov't 8.2% Ext Public Corp 3.3% Dom Public Corp 11.5% Total Public Corp TOTAL DEBT 75.6% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 5 Preliminary GDP of $2225.3 million sourced from Economic Research and Policy Unit, Ministry of Finance Medium Term Economic and Fiscal Outlook (year????)
2019 Debt Portfolio Review Produced by the Debt Management Unit 10 | P a g e The Government of St. Vincent and the Grenadines 5.1 External Public Debt As at 31st December 2019, total public external CHART 2: EXTERNAL DEBT BY CATEGORIES debt stock totaled $1.18 billion or 53.0 percent of 2018 GDP.

This represented an increase of 9.1 percent over $1.08 billion in 2018.
The Central 2019 Government’s portion of the external debt 16.7% 11.9% 83.3% 88.1% represented 88.1 percent of total external debt, an increase of 4.8 percent.

The remaining 11.9 percent represented external Public Corporation 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Ext Public Corp Ext Central Gov't debt.

This component decreased by 4.8 percent.


SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 5.1.1 Creditor Category As at the end of December 2019, the data below (table 2) shows that 46.8 percent of the total external debt was financed on highly concessional terms by multi-laterals creditors, which equates to low interest rates and long repayment period.
Continued efforts are being made to increase the average time to maturity of the public debt which is reflected in a 21.4 percent increase in debt owed to multi-lateral creditors.

Debts owed to both multi-lateral and bi-lateral creditors accounted for 82.4 percent of total external debt.

The remaining 17.6 percent of the external debt stock is attributed to securities holders.
The portion of external commercial debt owed during the year 2018 was matured and repaid to the Bank of Nova Scotia (Canada) in 2019.
TABLE 1: TOTAL EXTERNAL DEBT BY CREDITOR CATEGORY Category Multilateral Bilateral 2019 ($M) 551.7 419.9 % of total Category 46.8% Multilateral 35.6% Bilateral Securities 207.0 17.6% Securities 2018 ($M) 454.5 442.1 180.2 % of total Change 42.1% 21.4% 40.9% -5.0% 16.7% 14.9% Commercial 0.0 0.0% Commercial 3.6 0.3% -100.0% Total 1178.6 100.0% Total 1080.4 100.0% 9.1% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 2019 Debt Portfolio Review Produced by the Debt Management Unit 11 | P a g e The Government of St. Vincent and the Grenadines 5.1.2 Creditor Composition The creditor composition of the external debt portfolio shows that 74.8 percent of the total debt is owed to the CDB, Securities holders, World Bank and Alba bank.
The CDB constitute the largest creditor, accounting for 28.4 percent of the portfolio.

During 2019, CDB disbursements was 26.6 percent of total central government disbursements, the majority of which was used to finance the national disaster management project; road rehabilitation and upgrade, UWI-open campus project and education and training development projects.

The World Bank’s share of debt went up by 117.5 percent occasioned by larger disbursements during the year.
Of the total central government disbursements made during the year, 97.7 percent was channeled towards financing the Fiscal Reform and Resilience programme; the Caribbean Regional Communications Infrastructure Programme and the Regional Disaster Vulnerability Reduction Project.

The share of debt owed to the IMF decreased by 46.6 percent as loans relating to disaster recovery and rehabilitation were repaid during the period.
TABLE 2: EXTERNAL DEBT OUTSTANDING BY CREDITOR EXTERNAL DEBT BY CREDITORS DOD 2019 $M % OF TOTAL DOD 2018 $M 328.7 180.2 89.2 156.3 108.9 105.3 37.9 12.2 20.7 11.1 29.8 % OF TOTAL Change 30.4 16.7 8.3 14.5 10.1 9.7 3.5 1.1 1.9 1.0 2.8 2.0% 14.9% 117.5% -7.5% 0.6% -4.9% -25.0% -2.5% -46.6% 0.0% -14.3% 335.30 206.99 193.96 144.70 109.55 100.08 28.45 11.94 11.05 11.10 25.50 28.4 17.6 16.5 12.3 9.3 8.5 2.4 1.0 0.9 0.9 2.2 Caribbean Development Bank Securities Holders World Bank ALBA Bank Petroleos De Venezula Republic of China UK Export Finance Damien Shipyard Group International Monetary Fund Government of Trinidad & Tobago Other [1] TOTAL 1178.62 100.0 1080.4 100.0 9.1% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 2019 Debt Portfolio Review Produced by the Debt Management Unit 12 | P a g e The Government of St. Vincent and the Grenadines 5.1.3 Instrument type The external debt portfolio principally consist of two types of instruments, loans and securities, with a trade credit facility instrument as well.
At the end of the period under review, loans totaled $971.6 million representing 82.4 percent of the total external debt portfolio, an increase of 7.9 percent when compared with $900.2 million over the comparative period in 2018.

The stock of debt under the rubric of securities during the period increased by 14.8 percent from $180.2 million in 2018 to $207.0 million in 2019.
Of the total securities (excluding Treasury Bills) issued during the period, $53.0 million was purchased by non-residents of which $5.4 million was issued in USD currency.
TABLE 3: EXTERNAL DEBT BY INSTRUMENT TYPE EXTERNAL DEBT BY INSTRUMENT TYPE Loans Securities DOD 2019 $M 971.6 % OF TOTAL 82.4 DOD 2018 $M 900.2 % OF TOTAL 83.3 Change 7.9% 207.0 17.6 180.2 16.7 14.8% Bonds & Notes T. Bills 134.6 72.4 11.4 6.1 106.4 73.9 9.8 6.8 26.6% -2.1% TOTAL 1178.6 100.0 1080.4 100.0 9.1% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 5.1.4 Economic Sector Table five below shows that the majority of the external debt portfolio was allocated to finance activities in the multi-sector component of the economy, which captured debt owed under Petro Caribe and bonds and notes issued during the year to finance a myriad of activities in the economy.
The other major sectors are air transport; budget support and education.

These sectors combined constitute 77.4 percent of all external debt.

All sectors, with the exception of air transport recorded increases in their share of total external debt outstanding.
2019 Debt Portfolio Review Produced by the Debt Management Unit 13 | P a g e The Government of St. Vincent and the Grenadines TABLE 5: EXTERNAL DEBT BY ECONOMIC SECTOR Agriculture Air Transport Balance of Payment Budget Support Defense Education & Training Energy (Electricity) Finance, Insurance, Etc.
Health & Social Welfare 2019 2.9 % of Total 0.3 2018 2.6 % of Total 0.2 Change 13.2% 242.2 20.5 256.7 23.8 -5.7% 7.9 199.4 12.0 138.9 35.8 73.2 11.6 0.7 16.9 1.0 11.8 3.0 6.2 1.0 14.6 125.4 13.9 119.1 58.6 79.9 13.6 1.3 11.6 1.3 11.0 5.4 7.4 1.3 -45.2% 59.0% -13.9% 16.6% -38.9% -8.4% -14.1% Multisector 332.9 28.2 289.0 26.8 15.2% Roads and Bridges Telecommunication Other TOTAL 98.7 20.9 2.2 8.4 1.8 0.2 85.9 16.5 4.7 7.9 1.5 0.4 15.0% 26.3% -53.0% 1,178.6 100.0 1,080.4 100.0 9.1% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 5.1.5 CURRENCY COMPOSITION The currency composition of the external debt remained relatively unchanged from its position at the end of 2018 with the major currencies being the USD, XCD and XDRs in that order.
Altogether, debt denominated in USD and XCD accounted for 91.2 percent of the portfolio which translates into a low currency risk exposure of the external and by extension, the total public debt to changes in exchange rate.

The currency grouping under the rubric of “other” is comprised of the Euro, Trinidad and Tobago dollar and the Kuwait Dinar.

These represent a combined floating rate currency which is susceptible to changes in exchange rate.
2019 Debt Portfolio Review Produced by the Debt Management Unit 14 | P a g e The Government of St. Vincent and the Grenadines TABLE 6: EXTERNAL DEBT OUTSTANDING BY CURRENCY COMPOSITION US Dollars 2019 ($M) 897.7 % of Total 76.2% 2018 ($M) 789.2 % of Total 73.0% Change 13.8% Eastern Caribbean Dollars 176.3 15.0% 157.4 14.6% 12.1% Special Drawing Rights 103.8 8.8% 133.3 12.3% -22.1% Other Total 0.7 0.1% 0.6 0.1% 13.6% 1178.6 100.0% 1080.4 100.0% 9.1% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 5.1.6 Interest Rate Structure The interest rate structure of the external debt portfolio showed an increase in the nominal value of debt with fixed interest rate as at the end of 2019 compared to the previous year moving from 61.1 percent in 2018 to 65.0 percent in 2019.
Consequently, the share of external debt with floating interest rates fell from 38.9 percent at the end of 2018 to 35.0 percent in 2019.

The change in the interest rate structure was mainly due to new bonds and loans being contracted with fixed interest rate terms.
TABLE 7: EXTERNAL DEBT OUTSTANDING BY INTEREST RATE COMPOSITION EXTERNAL DEBT BY INTEREST RATE COMPOSITION Fixed Rate Floating Rate Of Which: DOD 2019 $M % OF TOTAL DOD 2018 $M % OF TOTAL CHANGE 766.1 65.0% 660.2 61.1% 16.0% 412.6 35.0% 420.2 38.9% -1.8% Caribbean Development Bank OCR 238.0 20.2% 237.9 22.0% 0.1% London Interbank Offer Rate (6mth) 81.3 6.9% 86.3 8.0% -5.8% TOTAL 1178.6 100.0% 1080.4 100.0% 9.1% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 2019 Debt Portfolio Review Produced by the Debt Management Unit 15 | P a g e The Government of St. Vincent and the Grenadines 5.1.7 External Disbursements Total disbursements on external debt amounted to $281.1 million in 2019.
IDA and CDB accounted for 76.2 percent, which funded projects and programs across several sectors.

The largest disbursement was from the Fiscal Reform and Resilience credit financed by IDA in the amount $81.0 million.

The energy sector saw disbursements relating to geothermal energy totaling $65.6 million in grants.

Disaster management, education and road related projects also saw significant disbursements, see table 8.
TABLE 8: DISBURSEMENTS ON EXTERNAL DEBT BY CREDITOR AND SECTOR SOURCE: DMU MINISTRY OF FINANCE AND ECONOMIC PLANNING Six new external loans were contracted during 2019 as follows: 1.

A loan from CDB in the amount of US $14.527 million for Natural Disaster Management Risk Reduction and Adaptation.

2.

A loan from CDB in the amount of US $7.6 million Natural Disaster Management Rehab and Reconstruction.

3.
3.

A loan from CDB in the amount of US $0.489 million for Technical Assistance: Canouan Airport Runway Rehabilitation.

4.

A loan from CDB in the amount of US $13.467 million for the Sandy Bay Sea Defense Resilience Project.

5.

A loan from EXIM Bank in the amount of US $50.0 million for Hotel Development.
2019 Debt Portfolio Review Produced by the Debt Management Unit 16 | P a g e External Sector RoadBudget SupportTelecomHuman Service DeliveryEducationMultisectorTourismSea DefenseAgriculture Disaster ManagementEnergyTotal Caribbean Development Bank5,851,034 - - - 25,677,927 - - 47,846 - 7,549,859 64,591,007 103,717,673 Caricom Development Fund - - - - - - - - - - 1,080,000 1,080,000 International Development Association- 81,000,000 4,876,342 1,521,882 - - 73,710 785,430 22,203,622 - 110,460,986 Intl Bank For Reconstruction- - - - - - - - - 5,067,368 - 5,067,368 Various Creditors - - - - - 53,589,000 - - - - - 53,589,000 Opec Fund for International Development1,525,712 - - - - - - - - - - 1,525,712 Kuwait Fund for Arab Development5,617,341 - - - - - - - - - - 5,617,341 Total12,994,087 81,000,000 4,876,342 1,521,882 25,677,927 53,589,000 73,710 47,846 785,430 34,820,849 65,671,007 281,058,080 The Government of St. Vincent and the Grenadines 6.
A loan from IDA in the amount of US $30.0 million for Fiscal Reform and Resilience Development Policy Credit.

All conditions precedents to disbursement of these loans were fully satisfied making these loans effective.

Disbursements on all loans however, did not commence in 2019.

5.2 Domestic Public Debt Total domestic debt at the end of December, 2019 stood at $493.2 million or 22.2 percent of GDP.
This represented a decrease in total domestic debt of 14.4 percent when compared to the corresponding period of 2018.

Of the total domestic debt $465.0 million or 94.3 percent was held by Central Government while the remaining $28.2 million or 5.7 percent was held by the Public Corporations, these amounts represented 20.9 percent and 1.3 percent of GDP respectively.

5.2.1 Instrument Type Table 7 shows the breakdown of domestic debt by instrument.
As at the end of 2019, securities CHART 2: DOMESTIC DEBT BY CATEGORIES and insurance deposits increased in nominal value and represented an increase of 7.1 and Dom Public Corp 12.4% 5.7% 1.3 percent respectively.

All other instruments decreased in nominal value which resulted in a reduction the total domestic debt outstanding.
The value of loans decreased significantly by $51.6 million or 29.5 percent as a result of the central government’s resolution of the $42.7 million National Property Limited (NPL) loan with the National Insurance Services (NIS).

A Dom Central Govt 87.6% 94.3% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 2018 2019 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING total share of 82.6 percent of the total debt was held in loans and securities instruments.
2019 Debt Portfolio Review Produced by the Debt Management Unit 17 | P a g e The Government of St. Vincent and the Grenadines TABLE 9: DOMESTIC DEBT BY INSTRUMENT 2019 123.0 31.7 31.1 22.6 % of Total 24.9% 6.4% 6.3% 4.6% 2018 174.6 40.9 72.7 22.3 Loans Overdraft Accounts Payables6 Insurance Deposits % of Total 30.3% Change -29.5% 7.1% -22.4% 12.6% -57.2% 3.9% 1.5% 7.1% Securities 284.8 57.7% 266.0 46.1% Bonds T.Bills TOTAL 273.1 55.4% 255.8 44.4% 6.8% 11.7 2.4% 10.2 1.8% 14.8% 493.3 100.0% 576.5 100.0% -14.4% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 5.2.2 Creditor Composition Outstanding debts owed to bond holders constituted more than half of the domestic portfolio.
Apart from the category securities holders, the Bank of St. Vincent and the Grenadines continued to be the largest creditor in the domestic debt portfolio with 18.3 percent as at December 2019.

As mentioned previously, Cabinet took the decision to settle the NPL loan of $42.7 million with the National Insurance Services.

This was the major driver in the reduction in debt outstanding to the National Insurance Services by 53.9 percent.
An amount of $37.5 million in short-term loans contracted from BOSVG and ECCB was repaid in full during this period.
TABLE 10: DOMESTIC DEBT BY CREDITOR DOMESTIC CREDITOR DEBT BY DOD 2019 % of Total DOD 2018 Securities Holders ECCB 284.8 25.0 57.7% 266.0 5.1% 22.5 % of Total 46.1% 3.9% Change 7.1% 11.1% 6 In 2019 the government classification of accounts payables was revised to exclude transfers and subvention 2019 Debt Portfolio Review Produced by the Debt Management Unit 18 | P a g e The Government of St. Vincent and the Grenadines Bank of St. Vincent and the Grenadines Other Financial Institutions 90.5 18.3% 109.2 18.9% -17.1% 1.1 0.2% 1.2 0.2% -8.3% Insurance Companies 22.6 4.6% 22.3 3.9% 1.3% National Insurance Services Accounts Payables 38.1 31.1 7.7% 82.6 14.3% -53.9% 6.3% 72.7 12.6% -57.2% Total 493.3 100.0% 576.5 100.0% -14.4% Source: DMU, Ministry of Finance and Economic Planning 6.
CENTRAL GOVERNMENT DEBT The total Central Government debt at the end of 2019 increased by 7.0 percent to $1.50 billion or 67.6 percent of GDP when compared to $1.40 billion or 64.1 percent of GDP as at the same period in 2018.

Of this amount, the external component increased by 15.4 percent and accounted for $1.04 billion and the domestic component decreased by 7.9 percent to $465.0 million.
The analysis of the Central Government debt using the Medium-Term Debt Strategy toolkit shows that at the end of 2019 the average time to maturity (ATM) and the average time to re-fixing (ATR) of the total portfolio was 6.6 years and 5.6 years respectively.

Debt maturing in one year was 24.5 percent of the total portfolio and 16.8 percent of GDP.

Debt with a fixed interest rate constituted 80.0 percent of the portfolio with Non-USD debt amounting to 19.8 percent of the total debt.
CENTRAL GOVERNMENT DEBT PORTFOLIO RISK INDICATORS Risk Indicators Nominal debt as % of GDP Present value debt as % of GDP Interest payment as % of GDP Implied interest rate (%) Refinancing risk Debt maturing in 1yr (% of total) Debt maturing in 1yr (% of GDP) ATM External Portfolio (years) ATM Domestic Portfolio (years) ATM Total Portfolio (years) 2019 67.6 61.8 2.8 4.1 24.5 16.8 9.6 2.9 6.6 19 | P a g e 2019 Debt Portfolio Review Produced by the Debt Management Unit The Government of St. Vincent and the Grenadines Interest rate risk FX risk ATR (years) Debt re-fixing in 1yr (% of total) Fixed rate debt (% of total) Non USD debt as % of total ST FX debt as % of reserves 5.6 42.1 80.0 19.8 14.0 Figure 1 below depicts the redemption profile of the Central Government’s debt portfolio by remaining maturity.
It shows that the external redemption profile is relatively smooth whereas short-term instruments7 and bullet bonds due to mature in the given year, in the domestic portfolio has resulted in a higher and more uneven redemption profile in 2020.

The profile also shows a small spike in the domestic repayment schedule in 2026 as bullet bonds become due.
FIGURE 1: CENTRAL GOVERNMENT REDEMPTION PROFILE AT DECEMBER 31, 2019 External Domestic 400 350 300 250 200 150 100 50 SOURCE: MTDS ANALYTICAL TOOLKIT 7 Short term instruments consists of Accounts Payables, Treasury Bills, Insurance Deposits and the Overdraft 2019 Debt Portfolio Review Produced by the Debt Management Unit 20 | P a g e The Government of St. Vincent and the Grenadines 6.1 Securities issued during 2019 Total securities issued during the year amounted to $149.8 million.
Tenors on these instruments ranged from five (5) to ten (10) years with an average tenor of 7.9 years.

The interest rate on the note issued by the Government was 6.25 percent with an average interest rate of 7.0 percent on longer term government bonds.

These securities were issued through a mix of private placement and the RGSM in a 7:3 ratio, with 70.0 percent of the instruments offered being amortized, with the remainder being bullet bonds.
Request for the listing of most private placement securities on the RGSM was done subsequently to facilitate potential liquidity needs of investors.

The investor data on the securities issued showed a home (domestic) bias for bonds and notes versus treasury bills which were heavily biased towards foreign (external) investors.

During the year $65.2 million in bullet bonds and notes were matured and fully repaid.
TABLE 11: SECURITIES ISSUED DURING 2019 Securities Platform Instrument Original Amount ($ M) Tenor Rate Issue Date Maturity Date Structure Private Placement Private Placement Private Placement Private Placement Bond Bond Bond Bond 15.000 8 yrs 7.25 18-Mar-19 18-Mar-27 Bullet 10.000 10 yrs 7.50 17-Apr-19 17-Apr-29 Amortized 14.855 7 yrs 7.00 17-May-19 17-May-26 Bullet 10.000 8 yrs 7.25 14-Jun-19 14-Jun-29 Amortized Private Placement Bond 12.000 10 yrs 7.50 18-Jul-19 19-Jul-29 Amortized Private Placement Bond 9.450 10 yrs 7.50 18-Jul-19 18-Jul-29 Bullet Private Placement Bond 5.400 7 yrs 6.15 28-Nov-19 28-11-26 RGSM (VCN080524) Note 17.664 5 yrs 6.25 7-May-19 7-May-24 Amortized Amortized RGSM (VCG070926) Bond 25.000 7 yrs 7.00 13-Sept-19 13-Sept-26 Amortized RGSM (VCG071226) Bond 30.000 7 yrs 6.75 16-Dec-19 16-Dec-26 Amortized Total 149.369 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 2019 Debt Portfolio Review Produced by the Debt Management Unit 21 | P a g e The Government of St. Vincent and the Grenadines 6.2 Regional Government Securities Market In 2019 the Government of St. Vincent continued to participate and contribute to the development of the RGSM by issuing $28.0 million in 91-day treasury bills monthly, all of which were oversubscribed, 11 of which recorded discount rates significantly below the reserve price of 4.82 percent.
Appendix 8 shows that there has been an increasing appetite for shorter term investment opportunities, which the government has responded to over this years, by increasing the issue amount of each T. bill offered from $16.0 million at the inception of the market in 2002 to the present amount of $28.0 million.

The increased demand has also resulted in reductions in average discount rates significantly below the reserve price of 4.82 percent.
As at December 2019, St. Vincent and the Grenadines had successfully issued 194 T-Bills on the RGSM.

For the period under review the weighted average discount rate decreased to 2.22 percent (average bid amount of $38.1 million) compared with 2.53 percent (average bid amount of $39.1 million) in 2018.
The average number of bids per auction increased from 10.9 to 18.9 bids, average oversubscription per auction fell from $11.1 million to $10.7 million and the bid to cover ratio decreased slightly from 1.28 to 1.25.

During 2018, 11 T-Bills were issued, of these November and December recorded discount rates at the reserve price.

During 2019, May’s auction also closed at the reserve price, these accounted for the spikes in the yields.
The data also showed that for each of the twelve auctions there were more non-resident investors participating in the auctions and as such they were allotted a larger portion of T-Bills than resident investors.
CHART 3: TREASURY BILLS YIELDS 2019 & 2018 M $ C E 55 50 45 40 35 30 25 20 15 10 5 0 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 p e r c e n t Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 Total Bid Amount 2018 Total Bid Amount 2019 Yield 2018 Yield Source: www.ecseonline.com 2019 Debt Portfolio Review Produced by the Debt Management Unit 22 | P a g e The Government of St. Vincent and the Grenadines TABLE 12: OUTSTANDING TREASURY BILLS ON THE RGSM AS AT DECEMBER 31, 2019 Date of Issue Redemption Date Issue Amount Value of Bids Amount Accepted Total Successful Interest Rate % No.
of Bids $M $M $M 18-Oct-19 20-Jan-20 28.000 41.300 28.000 14-Nov-19 14-Feb-20 28.000 39.400 28.000 19-Dec-19 20-Mar-20 28.000 39.155 28.000 19 20 17 14 13 14 1.998 1.999 1.999 TABLE 13: OUTSTANDING NOTES ON THE RGSM AS AT DECEMBER 31, 2019 Trading Symbol Issue Amount Amount Outstanding Original Maturity Remaining Maturity Issue Date Maturity Date Coupon Rate $M $M (years) (time) Date Date VCN030720 35.000 35.000 VCN080524 17.664 15.897 3 5 6 mths 3-Jul-17 3-Jul-20 4.5 yrs 7-May-19 7-May-24 % 6.00 6.25 TABLE 14: OUTSTANDING BONDS LISTED ON THE RGSM AS AT DECEMBER 31, 2019 Trading Symbol Issue Amount $M Amount Outstanding $M Original Maturity (years) Remaining Maturity (years) Date of Subscription Date Final Redemption Date Coupon Rate % VCG100422 VCG100323 VCG070821 FVG100826 VCG100826 VCG070623 VCG080225 VCG0705AA VCG070524 VCG070625 VCG070725 Apr-12 Mar-13 Aug-14 Aug-16 Aug-16 Jun-16 Feb-17 May-17 May-17 Jun-18 Jul-18 Apr-22 Mar-23 Aug-21 Aug-26 Aug-26 Jun-23 Feb-25 May-25 May-24 Jun-25 Jul-25 7.50 7.00 7.00 7.00 7.00 7.00 7.50 7.50 7.50 7.00 7.00 2019 Debt Portfolio Review Produced by the Debt Management Unit 23 | P a g e The Government of St. Vincent and the Grenadines VCG0725AA VCG081126 VCG100628 VCG101128 VCG070926 VCG071226 13.0 15.0 7.5 10.0 25.0 30.0 11.1 15.0 6.3 9.0 25.0 30.0 7 8 10 10 7 7 6 7 9 9 7 7 Jul-18 Nov-18 Jun-18 Nov-18 Sep-19 Dec-19 Jul-25
 Nov-26 Jun-28 Nov-28 Sep-26 Dec-26 7.00 7.25 7.00 7.50 7.00 6.75 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 6.3.
Central Government External Debt As at December 31, 2019 Central Government disbursed outstanding external debt increased by 15.4 percent to $1.04 billion.

Of this amount, loans totaled $831.5 million representing 80.1 percent with the remaining $207.0 million or 19.9 percent in securities, of which bonds totaled $134.6 million and T-Bills $72.4 million.
TABLE 15: COMPOSITION OF EXTERNAL DEBT BY INSTRUMENTS EXTERNAL C.G DEBT BY INSTRUMENT TYPE Loans Securities Bonds T. Bills DOD 2019 $M 831.5 207.0 134.6 72.4 % OF TOTAL 80.1 DOD 2018 $M 719.7 % OF TOTAL 80.0 Change 15.5% 19.9 13.0 7.0 180.2 16.7 14.8% 106.4 73.9 9.8 6.8 26.6% -2.0% TOTAL 1038.5 100.0 899.9 100.0 15.4% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 6.3.1 Economic Sector The air transport sector accounted for the highest proportion of external debt as at the end of 2019 accounting for 23.3 percent of total Central Government external debt.
During this period commercial debt owing to Bank of Nova Scotia (Canada) was retired with no new loans contracted.

The budget support category increased its share of outstanding debt by 59.0 percent due disbursements of $81.0 million from IDA targeted at fiscal reform and resilience and to redeem high cost domestic debt in keeping with the 2019-2021 Medium Term Debt Management Strategy.
2019 Debt Portfolio Review Produced by the Debt Management Unit 24 | P a g e The Government of St. Vincent and the Grenadines TABLE 16: COMPOSITION OF CENTRAL GOVERNMENT EXTERNAL DEBT BY ECONOMIC SECTOR 2019 2018 Agriculture Air Transport Balance of Payment Budget Support Defence Education & Training Energy (Electricity) Finance, Insurance, Etc.
Health & Social Welfare Multisector Roads and Bridges Telecommunication Other TOTAL % of % of Total Total 0.3 0.3 28.5 23.3 1.6 0.8 13.9 19.2 1.5 1.2 7.8 7.8 1.6 1.2 8.9 7.0 1.5 1.1 19.8 21.4 9.5 9.5 1.8 2.0 3.1 5.2 100.0 100.0 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 2.9 242.1 8.0 199.4 12.0 80.5 12.9 73.2 11.6 222.4 98.7 20.9 53.9 1,038.5 2.6 256.7 14.6 125.4 13.9 69.9 14.4 79.9 13.6 178.3 85.9 16.5 28.3 899.9 Change 13.2% -5.7% -45.2% 59.0% -13.9% 15.2% -10.7% -8.4% -14.1% 24.8% 15.0% 26.3% 90.6% 15.4% 6.3.2 Currency Composition The United States (USD) currency continued to hold the higher share of the external debt at 71.0 percent in 2019.
Special Drawing Rights (XDR) and local Eastern Caribbean Currency (XCD) represented 17.0 and 11.0 percent respectively.

Each of these currencies increased their nominal share of the total external debt.

The category ‘other8’ accounted for the remaining 1.0 percent of the debt.

This category saw a decline in its nominal share of total debt.
CHART 4: CENTRAL EXTERNAL GOVERNMENT DEBT BY CURRENCY COMPOSITION 2019 2018 USD XDR XCD KWD Other USD XDR XCD KWD Other 0% 1% 17% 11% 0% 13% 0% 12% 71% 75% 8 Other is comprised of Trinidad and Tobago Dollars and the Euro 2019 Debt Portfolio Review Produced by the Debt Management Unit 25 | P a g e The Government of St. Vincent and the Grenadines 6.4 Central Government Domestic Debt Central government debt constitutes 94.3 percent of total domestic debt.
As at December 31, 2019 total domestic central government debt decreased by 7.9 percent moving from $504.8 million to $465.0 million.

A total of $65.2 million in bullet bonds matured and was repaid during 2019, of which 82.2 percent was held by domestic investors.

Of the total $149.4 million issued in new bonds and notes, 64.5 percent was classified as domestic debt based on residency criterion.

Disbursements on new contracted short-term domestic loans totaled $37.5 million.
The reduction in account payables by 57.2 percent contributed significantly to the reduction in central government’s total debt.
TABLE 17: DOMESTIC DEBT RAISING ACTIVITY FOR 2019 Loans Creditor BOSVG ECCB Total Loan Amount (EC $M) 12.5 25.0 37.5 Tenor 4 mths 1 yr Rate (%) 8.0 6.5 Issue Date Maturity Date 22-Mar-19 7-Aug-19 1-Nov-19 28-Oct-20 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 6.4.1 Domestic Debt Instrument Type As at December 31, 2019 a total of thirty-six (36) securities (including treasury bills) with a value of $284.7 million remained outstanding compared to twenty-nine (29) securities with a value of $265.4 million in the corresponding period in 2018.
The number of loans contracted by central government remained the same over the comparative period.
2019 Debt Portfolio Review Produced by the Debt Management Unit 26 | P a g e The Government of St. Vincent and the Grenadines CHART 5: DOMESTIC DEBT BY INSTRUMENT 300.0 250.0 200.0 M $ 150.0 100.0 50.0 0.0 Bonds Loans Overdraft 2019 2018 273.1 255.8 96.2 104.2 30.2 39.6 Account Payables 31.1 Insurance Deposit 22.6 72.7 22.3 T.Bills 11.7 10.2 2019 2018 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 6.4.2.
Domestic Debt by Creditor The analysis of the data showed generally a consistency in the dispersion of total central government domestic debt by creditors as observed under the rubric of total domestic debt.
TABLE 18: DOMESTIC CENTRAL GOVERNMENT DEBT OUTSTANDING BY CREDITOR DEBT DOMESTIC CREDITOR Securities Holders ECCB BY DOD 2019 % of Total DOD 2018 284.8 25.0 61.3% 266.0 5.4% 22.5 % of Total 52.7% 4.5% Change 7.1% 11.1% Bank of St. Vincent and the Grenadines Other Financial Institutions Insurance Companies National Insurance Services Account Payables 88.9 19.1% 107.4 21.3% -17.3% 0.0 22.6 12.6 31.1 0.0% 0.0 0.0% 0.0% 4.9% 22.3 4.4% 1.3% 2.7% 13.9 2.8% -9.6% 6.7% 72.7 14.4% -57.2% 465.0 100.0% 504.8 100.0% -7.9% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 2019 Debt Portfolio Review Produced by the Debt Management Unit 27 | P a g e The Government of St. Vincent and the Grenadines 6.5.
Central Government Debt Service 6.5.1 External Total external debt service for 2019 varied from the budgeted amount by 1.7 percent and increased by 9.0 percent over 2018.

The increase was driven by higher interest and amortization payments.

The most significant increases in debt servicing was on external bonds, which registered increases in principal repayment of 10.6 percent and 43.0 percent on interest repayment over 2018.
EXTERNAL DEBT SERVICE Interest Amortization TOTAL TABLE 19: EXTERNAL DEBT SERVICING Budgeted 2019 2018 Change Variance $M % 31.0 77.1 29.2 24.0 77.1 73.6 108.1 106.3 97.6 21.9 4.7 9.0 5.85 -0.01 1.67 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 6.5.2 Domestic Debt Servicing Total domestic debt service for 2019 varied from the budgeted amount by 12.9 percent and increased by 10.3 percent over 2018.

Increases were recorded in both interest and amortization payments.
Similar to the narrative under external bonds, the most significant driver of domestic debt servicing was the payment of bonds and notes occasioned by higher amortization and interest repayments, which increased by 37.5 and 12.4 percent respectively.

Sinking Fund contributions9 increased by 45.7 percent in 2019 over 2018, see table 20.

During the year a total of $65.2 million in bullet bonds matured and was repaid.

These maturing instruments were medium to long-term in nature.
9 Sinking fund provisions are no longer added to total debt servicing as it is not a cost incurred but monies set aside to meet future bond obligations 2019 Debt Portfolio Review Produced by the Debt Management Unit 28 | P a g e The Government of St. Vincent and the Grenadines DOMESTIC DEBT SERVICE Interest Amortization TOTAL Sinking Fund TABLE 20: DOMESTIC DEBT SERVICING Budgeted 2019 2018 35.6 60.3 95.9 51.9 24.7 58.8 83.5 32.4 23.3 52.4 75.7 22.2 % Change 6.0 % Variance 30.5 12.3 10.3 45.7 2.6 12.9 37.7 SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 7.0 PUBLIC CORPORATION DEBT At as December 31, 2019, total public corporations’ debt stood at $168.3 million, a decrease of 33.3 percent when compared with $252.2 million at the end of 2018.
Of the total public corporations’ debt, the domestic component amounted to $28.2 million, representing 16.8 percent compared with $71.6 million in 2018, a decrease of 60.6 percent.

The external component amounted to $140.1 million or 83.2 percent.
The level of government guaranteed public corporations’ debt remains within the limit specified in the Government Guarantee of Loans Act Cap 255.10 7.1 Public Corporation Debt by Borrower and Creditor Categories The NIS is the largest creditor for the domestic public corporations, accounting for 89.7 percent of the total domestic public corporations’ debt and 15.0 percent of the total public corporation debt.
As mentioned prior in the document, the NPL loan, that accounted for 59.8 percent of total domestic public corporations’ debt in 2018, was settled by Central Government, and resulted in a significant reduction in domestic public debt outstanding by 60.8 percent.

Similarly, external debt owed by LIAT was taken over by central government via Cabinet Decision, granting the approval for the GOSVG to service the LIAT’s CDB loan obligation on an ongoing basis.
Furthermore, a similar Cabinet Decision, likewise granted approval for the GOSVG 10 The current limit specified for all guarantees issued by Government is ECD 300.0 million.

2019 Debt Portfolio Review Produced by the Debt Management Unit 29 | P a g e The Government of St. Vincent and the Grenadines to take over the debt servicing of UWI’s CDB loan obligation as part of a financing plan to settle outstanding contribution arrears to the institution.
The largest external creditor remained Petro Caribe, representing 78.2 percent of the external public corporations debt and 65.2 percent of the total public corporation debt in 2019.
TABLE 21: PUBLIC CORPORATIONS DEBT BY BORROWER AND CREDITOR PUBLIC CORPORATION 2019 2018 DOMESTIC BOSVG CWSA Agriculture Input Warehouse Arrowroot Industry Association Kingstown Town Board Financial Services Authority Int'l Airport Development Co. SVG Port Authority SVG Postal Corporation Total NIS - 0.1 - 0.2 0.1 0.2 - 1.0 1.7 0.1 0.3 0.0 0.2 0.0 0.2 0.0 0.9 1.8 National Lotteries National Student Loan Company National Properties Total 4.4 21.0 - 25.3 5.0 21.0 42.8 68.7 % Change -100.0% -46.9% -100.0% 14.0% 188.6% 13.9% -100.0% 10.4% -5.7% -11.7% 0.0% -100.0% -63.1% St. Vincent Corporative Bank Housing and Land Development Corp. Total 1.1 1.1 1.2 1.2 10.4% 10.4% TOTAL DOMESTIC 28.1 71.7 -60.8% 2019 Debt Portfolio Review Produced by the Debt Management Unit 30 | P a g e The Government of St. Vincent and the Grenadines EXTERNAL CDB BOSVG LIAT UWI VINLEC Total AFD CWSA Total Alba VINLEC Total EIB VINLEC Total Petro Caribe PDVSA Total 18.7 - - 3.9 22.6 0.2 0.2 4.5 4.5 3.3 3.3 21.1 15.2 12.2 8.5 -11.5% -100.0% -100.0% -53.7% 56.9 -60.4% 0.8 0.8 8.5 8.5 5.4 5.4 -78.6% -78.6% -47.5% -47.5% -38.5% -38.5% 109.6 108.9 109.6 108.9 0.6% 0.6% TOTAL EXTERNAL 140.1 180.5 -22.4% TOTAL PUBLIC CORP DEBT 168.2 252.2 -33.3% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 7.2 Instrument Type Debt instruments for public corporation consisted of loans held with various banking institutions and the NIS as well as overdraft facilities with the BOSVG as shown in table 22 below.
2019 Debt Portfolio Review Produced by the Debt Management Unit 31 | P a g e The Government of St. Vincent and the Grenadines TABLE 22: PUBLIC CORPORATION'S DEBT BY INSTRUMENT TYPE AND CREDITOR DOMESTIC Loans BOSVG NIS Overdraft BOSVG 2019 $M 26.6 0.1 25.3 1.5 1.5 2018 $M 70.4 0.4 68.7 1.3 1.3 % Change -62.2% -66.4% -63.1% 14.0% 14.0% Total Domestic 28.1 71.7 -60.8% EXTERNAL Loans AFD CDB EIB ALBA Petro Caribe Total External 0.2 22.6 3.3 4.5 109.6 140.1 0.8 56.9 5.4 8.5 -78.6% -60.4% -38.5% -47.5% 108.9 0.6% 180.5 -22.4% SOURCE: DMU, MINISTRY OF FINANCE AND ECONOMIC PLANNING 7.3 Debt Service During the year all Public Corporations/Government Guaranteed Institutions with the exception of NPL, UWI and LIAT met their debt servicing obligations as scheduled.
These debt obligations have been settled by the Government, in the case of the NPL Loan or is being serviced by Central Government, in the case of UWI or in the case of LIAT is being serviced by the Government until further notice.
2019 Debt Portfolio Review Produced by the Debt Management Unit 32 | P a g e The Government of St. Vincent and the Grenadines APPENDICES Appendix I: Selected Public Debt Indicators 2009-2019 2019 Debt Portfolio Review Produced by the Debt Management Unit 33 | P a g e 20092010201120122013201420152016201720182019Total Public Debt 1,104.1 1,188.5 1,233.2 1,336.6 1,445.8 1,562.5 1,594.4 1,746.5 1,572.0 1,657.0 1,673.97 Total Central Gov't 836.7 986.6 1,040.7 1,140.0 1,229.7 1,348.8 1,379.8 1,429.3 1,322.2 1,404.8 1,505.66 External Debt559.0 734.8 764.9 738.1 809.5 887.7 922.5 1,201.8 1,003.6 1,080.4 1,180.77 Central Government457.1 623.1 668.0 652.7 728.7 811.2 855.7 962.0830.1899.90 1,040.70 Public Corporations101.9 111.696.985.480.876.566.8239.7173.5180.55 140.07 Domestic Debt545.1 453.7 468.3 598.5 636.3 674.8 671.8 544.7 568.41 576.51 493.20 Central Government379.6 363.5 372.7 487.3 501.0 537.6 524.0467.3492.12 504.85 464.96 Public Corporations165.5 90.2 95.6 111.2 135.3 137.2 147.8 77.476.30 71.66 28.24 Private Guaranteed External Debt 15.216.619.524.5 25.2 26.7Debt Service External 79.8 84.4 87.2 87.7 88.3 77.5 83.6 81.7 101.6 97.6 106.28 Central Government 70.7 71.7 74.6 72.7 72.7 60.8 62.9 65.183.376.8390.80 Public Corporations 9.1 12.7 12.6 15.0 15.6 16.7 20.8 16.6 18.320.815.48 Domestic Debt ServiceCentral Government52.8 64.8 47.2 48.7 58.1 72.0 72.8 83.3 82.797.9115.90 (of which sinking fund)6.0 12.0 6.0 4.0 5.5 7.6 7.6 12.1 14.0 22.0 32.37 GDP (at market price)1,822.1 1,839.3 1,825.5 1,871.0 1,947.3
 1,963.5 2,038.9 2,082.7 2,123.7 2,189.0 2,273.40 Current Revenue544.8 490.0 462.5 472.6 491.3 535.2 519.1 592.6 592.2 594.1 600.53 Central Gov'T Debt/GDP 45.9253.6457.0160.9363.1568.6967.6768.6362.2664.1766.23 Total Debt/GDP (%)60.6 64.6 67.6 71.4 74.2 79.6 78.2 83.9 74.0 75.7 73.63 External Debt/GDP (%)30.7 39.9 41.9 39.4 41.6 45.2 45.2 57.7 47.3 49.4 51.94 Domestic Debt/GDP (%)29.9 24.7 25.7 32.0 32.7 34.4 32.9 26.2 26.8 26.3 21.69 Central Gov't Debt Service, exclu Sinking Fund /Current Revenue (%)21.6 25.4 25.0 24.8 25.5 23.4 24.7 23.0 25.7 25.7 29.03 External Debt Service, Central Gov't , excl SF/ Current Revenue (%)13.0 14.6 16.1 15.4 14.8 11.4 12.1 11.0 14.1 12.9 15.12 Domestic Debt Service, Central Gov't, excl SF / Current Revenue (%)8.6 10.8 8.9 9.5 10.7 12.0 12.6 12.0 11.6 12.8 13.91 Guarantee Debt % of GDP0.150.110.110.110.120.120.120.170.120.120.07 Source: Ministry of Finance ($m) The Government of St. Vincent and the Grenadines Appendix II: Disbursements on External Loans by Creditor and Project 2019 CREDITORS Caribbean Development Bank NDM Disaster Risk Reduction and Climate Change Adaptation TECHVOC Education and Training Development UWI Open Campus NDM - Hurricane Tomas/ North Wd.
Highway NDM- Rehabilitation and Reconstruction South Leeward Highway Rehab and Upgrade Project UWI Open Campus Development Energy Efficiency Measures and Solar Photovoltaic Plant Subtotal for Caribbean Development Bank World Bank (IDA & IBRD) OECS Regional Tourism Competitive Project OECS Regional Agriculture Competitiveness Project Regional Disaster Vulnerability Project OECS Human Development Delivery Service Caribbean Regional Communication infrastructure Program Fiscal Reform and Resilience Development Policy Credit Subtotal for World Bank OPEC Fund for International Development Agriculture and Feeder Road Subtotal for OPEC Fund for International Development Kuwait Fund for Arab Development Feeder and Agriculture Road Subtotal for Kuwait Fund for Arab Development Grand Total Disbursed Amounts EC($) $783,880 $15,061,921 $10,616,006 $1,867,367 $4,946,458 $5,851,034 $10,616,006 50,372 $49,793,044 $73,710 785,430 $20,859,156 $1,521,882 $4,876,342 $81,000,000 $109,116,520 $1,525,712 $1,525,712 $5,617,341 $5,617,341 $166,052,617 2019 Debt Portfolio Review Produced by the Debt Management Unit 34 | P a g e The Government of St. Vincent and the Grenadines Appendix III: Composition of Total Public Debt 2009-2019 M $ D C X 1,200.0 1,000.0 800.0 600.0 400.0 200.0 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Ext Central Gov't 457.1 623.1 668.0 652.7 728.7 811.2 844.3 1,083.6 874.3 899.9 1,038.
Ext Public Corp 101.9 111.6 96.9 85.4 80.8 76.5 77.3 69.0 188.2 180.5 140.1 Dom Central Gov't 379.6 363.5 372.7 487.3 501.0 537.6 524.0 467.3 448.2 504.8 465.0 Dom Public Corp 165.5 90.2 95.6 111.2 135.3 137.2 147.8 77.6 76.2 71.6 28.2 Ext Central Gov't Ext Public Corp Dom Central Gov't Dom Public Corp Appendix IV: Debt to GDP 2009 - 2019 M $ D C X 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Debt/GDP (%) External Debt/GDP (%) Domestic Debt/GDP (%) 60.6 30.7 29.9 64.6 39.9 24.7 Total Debt/GDP (%) 67.6 41.9 71.4 39.4 74.2 41.6 25.7 32.0 External Debt/GDP (%) 32.7 79.6 45.2 34.4 78.2 45.2 83.9 57.7 74.0 47.3 26.2 32.9 Domestic Debt/GDP (%) 26.8 75.6 49.3 26.3 75.2 53.0 22.2 35 | P a g e 2019 Debt Portfolio Review Produced by the Debt Management Unit The Government of St. Vincent and the Grenadines Appendix V: Debt Service to Revenue 2009 – 2019 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Central Government Debt Service/Current Revenue (%) External Debt Service/ Current Revenue (%) Domestic Debt Service/ Current Revenue (%) Appendix VI: Treasury Bills Average Rates 2009-2019 s n o i l l i m $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 issue amount (in m) avg yield (in %) 2019 Debt Portfolio Review Produced by the Debt Management Unit 36 | P a g e The Government of St. Vincent and the Grenadines Appendix
 VII: LEGAL FRAMEWORK Finance Administration Act (FAA) Cap 252.
The Treasury Bills Act Cap 444 The Public Sector Investment Loan Act No.1 and No.

23 of 2019 The primary legislation which governs and explicitly authorizes the Government to borrow.

The Act stipulates that no money shall be raised on the credit of the Government except under its authority or another Act of Parliament or a resolution of the House of Assembly 11 .
The Minister of Finance when authorized by resolution of the House of Assembly may borrow money in a financial year “To meet current requirements from a bank or other financial institution by means of advances to an amount not exceeding the aggregate the sum specified in the resolution.” The current limit12 on the advance is $35.0m.

Governs the issuance of the T-bill.


The Act authorizes the Minister of Finance to borrow money by the issue of Treasury Bills by the Accountant General or by a financial institution outside St. Vincent and the Grenadines.

Section 3 (4) of the Treasury Bills Act provides that the principal sum of T-bills outstanding at any one time, shall not exceed 15.0 percent of the estimated annual revenue of St. Vincent and the Grenadines for the current financial year.
Authorized the Government to borrow a total of $150.0 million to finance the 2019 Public Sector Investment Programme.

The Caribbean Development Bank Loans Act Cap 89 Covers all loans from the CDB The International Financial Organizations Act Cap 100 The Government Guarantee of Loans Act Cap 255 Authorizes the Minister of Finance to sign agreements with the World Bank and the International Monetary Fund Gives Government the authority to guarantee loans by lending agencies to corporations.
The current limit specified for all guarantees issued by Government is EC $300.0 million.

11 Sec 44, Finance Administration Act Cap 252 12 Resolution of Parliament 29th January, 2016 2019 Debt Portfolio Review Produced by the Debt Management Unit 37 | P a g e