Nomura underwrites $132 million bond issue: St. Maarten Airport raises millions for upgrade projects

POSTED: 01/14/13 1:04 PM
From Left to right Finance Minister Roland Tuitt, airport Managing Director Regina Labega, Supervisory Board of Directors chairman Clarence Derby, Nomura Managing Director Patrick Quinn, and Tourism and Economic Affairs Minister Romeo Pantophlet. (Photo courtesy PJIAE)

St. Maarten – It was all smiles in New York last week Thursday at the ceremonial closing of the US$132 million Princess Juliana International Airport bond issue underwritten by Nomura Securities International Inc. The closing was attended by a high-powered St. Maarten delegation led by Minister Romeo Pantophlet of Tourism and Economic Affairs whose portfolio includes the airport and Finance Minister Roland Tuitt.

Speaking at the ceremony at the offices of Nomura Securities International in New York both ministers thanked the team that made the historic bond issuance possible.
Minister Tuitt said the bond issue was good for St. Maarten, adding that it was precisely this that led him to finalize the official Moody’s rating for the island. For his part, Minister Pantophlet said it would further facilitate the hub function of the island.
Acknowledging that the process was long and sometimes complicated Nomura’s Managing Director Patrick Quinn said that Moody’s rating had paved the way for the bond to be issued. He added that the fact that these bonds had not traded since they were offered reflects the purchaser’s confidence in the airport. Quinn said Nomura was happy to underwrite the bonds for one of the leading airports in the Caribbean.
Nomura is a Tokyo-based financial services group and global investment bank with regional headquarters in Hong Kong, London, and New York. Nomura has operations in 18 exchanges all over the world and has held the number one position on the London Stock Exchange since 2007.

According to the Financial Times Nomura became the world’s largest independent investment bank in 2008 with Y20,300 billion ($222 billion) assets under management when it acquired Lehman Brothers in the Asia-Pacific region and subsequently its investment and equities portfolios in Europe and the Middle East.

Chairman of the Supervisory Board of Directors of PJIAE Clarence Derby said he was happy for the closing and thanked the St. Maarten government and in particular the two ministers for their support from the very beginning. Also in attendance at the ceremony was the Chairman of the Princess Juliana International Airport Holding Company, Dexter Doncher.
The issuance of the bonds – and the fact that it was over-subscribed almost immediately – “is without doubt a vote of confidence in the direction the Princess Juliana International Airport has chosen, and a resounding thumbs up for the stability of the economy of St. Maarten and for its leadership, which is very well represented here today,” the airport’s Managing Director Regina Labega said.

The Princess Juliana International Airport the first and so far the only company on St. Maarten to have rated bonds, it is also remarkable that this huge amount of money, at least for an island of a population of about 60,000, was secured at very favorable terms of a fixed rate of 5.5% over 15 years. This is a significant decrease from the 8.25% interest rate obtained in the 2004 financing of $118 million and a net savings of some $10 million for the airport.

“There can be no better way to begin the New Year – and kick off the 70th Anniversary celebrations of our Princess Juliana International Airport – than with the official closing of this bond issue that would permit the airport to diligently pursue its multi-million dollar capital improvement Program,” Labega said.

“We are starting a new era in the development of our airport, and consequently, the continued sustainability of St. Maarten’s economic growth,” she said in her address. “Every improvement we make also means huge benefits for the economies of the surrounding islands of Anguilla, St. Barths, Saba, and St. Eustatius.”

“To take our airport to new heights, the capital improvement program which these bonds will finance include: resurfacing of the airport runway; construction of taxi-ways to increase runway efficiency; expanding the aprons to provide additional aircraft parking during peak traffic periods; and relocating various facilities to improve the efficiency of the airport facilities and to provide for future growth.”

Work on the runway upgrade is expected to begin next month for completion by August. All work will take place overnight starting at 10 p.m. after the last flight operation of the day and end at 6 a.m. before the first flight of the day. No flight interruptions are expected.

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