Cohen loan deal cancelled

| 02/02/2011

(CNS): The controversial deal that government had entered into with the New York based finance firm Cohen & Company Capital Markets LLC to borrow US$185 million has been terminated. The country’s premier told the nation in a live broadcast Wednesday evening that the 4.5% interest rate cap which the firm said it could get had not materialised and government had cancelled the arrangement. McKeeva Bush also revealed that government may reconsider its borrowing requirement in light of new positive figures for the first half of this financial year, which reveal an unaudited public surplus of $17m instead of an expected $14m deficit.

“The encouraging performance in the first six months of the year will cause the government to assess whether it needs to utilise its full borrowing empowerment,” Bush told the people in the official statement. “The assessment arises from the government’s philosophy of minimising borrowing in order to act in the best interest of the country, at all times.”

Bush delivered the news about the country’s improving finances after explaining that the controversial deal with Cohen and Co had collapsed. He said government had been advised that the savings of approximately US$24 million on the bid recommended to government via the Central Tenders Committee would not be realized.

“Key amongst the representations made to government was that a 4.5% Interest Rate Cap could be obtained, at a certain price, so that the rate of interest that government would pay on its current year borrowing would never exceed 4.5%,” Bush said as he explained why he had originally opted for the Cohen deal last October instead of accepting the recommendations of the ministry’s technical team, which was endorsed by the CTC.

“Government has now been advised that the 4.5% Interest Rate Cap cannot be obtained at the price previously represented to government. The increase in the price of the Interest Rate Cap is of such magnitude that it would wipe-out the cost-minimisation advantage that had been agreed.”

He said government has always acted in the country’s best interests so it had cancelled the deal. Now with the news that government finances are improving the amount government needed to borrow needed to be reviewed, but he warned that the solid performance may not necessarily continue at the same rate in the next six months.

The improvement in the state of the government’s coffers, Bush said, was not an accident. "The expenditure results being lower than budget expectations are a direct result of a conscious effort being taken across the government and supported by the wider public sector to restrainexpenditures without jeopardising the quantity or quality of services offered to the public,” the premier noted, as he congratulated the public service for its efforts.

The premier stated that total operating revenues were $267 million, around $12 million better than budget expectations of $255 million for the half-year. He revealed that operating expenses were down to $236 million $17 million less than budget expectations. Financing expenses for the half-year were also around $2 million dollars less than expected and central government was looking at an unaudited surplus for the half-year of $17m, which was significantly better than the expected deficit for the half-year of $14 million.

With statutory authorities and government companies showing a surplus of around $1 million instead of an anticipated deficit of $800,000, the entire public sector surplus for the half-year to 31 December 2010 was a promising $18 million, instead of an overall $15 million. 

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  1. Miss Sarah says:

    It’s admirable that our Premier is strong enough to review situations and have a change of mind. So many leaders stick to their guns for the sake of appearing in control.

  2. Anonymous says:

    My prayer is that the populace will be able to clear the trees and see the forest. We like to follow what others do, so follow what other countries do when they have poor leadership. Stop watering down the dregs, through it out.

  3. samantha says:

    Good job Mac!

    • Anonymous says:

      Yeah very good Job, Mac. I mean, after all, the 1.5 million that this ‘deal’ supposedly cost the people of the Cayman Islands because YOU refused to play by the rules and because COHEN COULD NOT DELIVER(!?) could have been a LOT MORE, right? Heaven help us. I really wish I knew your secret because in the face of all this you STILL seem to have people rooting FOR you!

  4. balance says:

    Folks, it is clear as day that the financial position has changed since MB entered into this loan deal. Also the terms of the deal has changed i.e. interest rate agreed upon couldn’t be gotten. Why would he still be going head long into the deal then? Folks, you don’t have to be so pro PPM that you stop thinking logically. Even in the face of this great news you are still chatting fart.

    • Anonymous says:

      Quite a big fart $1.5million of it, if that is what the up front fee was on the deal and amount which is a norm for this type of deal. Isn’t that wasted money. Obviously, since things have changed and borrowing maybe less, a less costly outcome could have been achieved if we had stayed with the local bank deal. Money down the drain…….

      • Anonymous says:

        Money down the drain is perfectly correct. THAT is the price that WE THE PEOPLE OF THE CAYMAN ISLANDS (NOT McKeeva Bush) pay for our premiers refusal to follow protocol. It probably would have STILL been a done deal at untold cost to this country if there hadn’t been such a large public outcry about the whole ‘deal’. God help us.

    • Anonymous says:

      Speaking of ‘chatting fart’…

  5. Anonymous says:

    The only questions left to be answered are how many millions of OUR money were blown paying a non-refundable signing fee for this didn’t happen deal, did any party insiders get a “finder’s fee” or kickback out of it, and if so who?

    • The Original Anon says:

      I believe that Anonymous 21:39 has nailed it here. Ask FOI how many millions were lost in this debacle.

  6. Angry & Upset says:

    The Governor has been on the job for one year now, so his probationary period is officially over.

    I do not blame the Governor for the people of questionable character that the electorate chose to send to the LA as their representatives, but by damn I will hold him responsible for his promise of “good governance” during his term of office.

    If one unrecoverable red cent of the people’s money, never mind the $1.5M that has been bandied about by posters here, has gone to Cohen because of the Premier’s unorthodox handling of this country’s finances, then the Governor had better use his reserve powers to right the wrong or I will start a very public petition to have him recalled for gross negligence.

    • TJ says:

      You said, “unorthodox handling of this country’s finances…” Definitely, you are so caught up on how the Premier do things that you fail to see what was done! Tell me, what is a loan? It is definitely not a revenue… rather it is an ADDITIONAL DEBT! So please stop blabbling nonsense! LOL… Petition the Governor if you want, I’ll see how far you will get, because the Premier has alot on his side.

  7. cayman stew says:

    I believe this is a good move by mac! It is better to cancel a deal than having us more into debt.

    • Anonymous says:

      You’re right… and its even better not to have to ‘cancel’ the ‘deal’ in the first place.

  8. Mat says:

    I pray earnestly for our ministers and their families. That God will direct the Premier’s soul and mind towards making the right decisions for our beloved islands, Cayman Islands. In these dark times, I feel God will never leave us nor forsake us. We have to keep positive and acknowledge the little things of life. Stop the slandering, the political rhetoric that is not edifying, the mischaracterizations, the blowing out of proportion the negative things we find in each other. These things can’t build us up as a country. We have to unite and whoever are in position, we have to support them. If we have nothing to say that is wholesome and constructive, it is best to remain silent and ponder on the good things God has bestowed upon us in our lives and in our governments. Most of all, compared to other countries, we ought to be always thankful. Good Night

  9. homeowner with kids says:

    Cayman’s Leader: “The assessment arises from the government’s philosophy of minimising borrowing in order to act in the best interest of the country, at all times.” In his words, I agree 100%

  10. sweetie pie says:

    Great! CTC process my pretty arse! The goal is to get there! Not waste time analysing and engaging in meaningless processes.

  11. UCCI says:

    UDP GOVERNMENT:

    OPERATING REVENUE – $267 MILLION
    OPERATING EXPENSES – $236 MILLION

    Folks, over a 10 million difference is swell, but a 31 million difference and growing in rough economic times, is HOPEFUL! Let us continue to support our government and its ministers.

    • Anonymous says:

      Perhaps you could consider ‘false reporting in our own favor’ into those ‘results’?

  12. phil says:

    An excellent decision made by McKeeva Bush!  I would rather be in a state where I am not obligated to pay back millions to a lender. Accumulations in loans and debts has been blamed for worldwide economic problems.  I recall how our previous governments put us in debt; it is always equivalent to excessive expectations on future returns. They thought that they would have been able to pay off the excess expenditures and operational spending, and look what happened to Cayman? Big loans and more debt:  how do you think the U.S. credit crunch impact the banksand the world?  So I am grateful that the Premier sees the seriousness in placing us under more obligations. 

  13. Js Bloomberge says:

    This is very smart move by the Premier, another demonstration also seen on other news outlets of his careful and deliberate decisions made for our best interest. Too often we have to wait for CTC and obstructive processes in order to get something done. The people voted him in to get the job done – not take forever, which many of his opponents want, who don’t love the Cayman Islands. The Premier went ahead and cancelled the deal – that’s my man! Would Allen, Arden, or some other had balls to do that for love of the economy? Of course not! That is why the Governor Taylor supports his endeavor and AG as well, because there is a deadline! It is either we better our economy or we will be forced to TAX!!!

  14. Brasserie says:

    It is good that the Premier has voided the deal with Cohen and Company. At one time, he had alot of people spurring him here even on cns, on attempting to get the loan. Now that he has voided the deal, the commenters here seem to have a problem that he voided it – that he is flip-flopping. So what? I am happy that something is being done to get us out of the mess that the previous government brought on us. Kurt and Alden Mclaughlin and crew had the audicity to blame it on Mr. Global Recession and Mrs. Paloma whilst they spent monies from the public purse with no regard of fiscal discipline. At least, the Premier is signing MOU’s and making agreements… yes, with Dart and wealthy folk to increase revenue and jobs. Imagine if we had another 4 years of ppm… I say, what a disaster that would have been.

  15. noname says:

    I would just like to say that Mckeeva is the Premier because during the last elections UDP won. This means that the majority of the voters wanted UDP, knowing that McKeeva would become Permier. Now people are arguing over his decisions…all I have to say is that there is nothing you can do to get UDP out of power, unless as someone implied in an earlier post, turning Cayman into the Egypt of the Caribbean. So I say if you all are unhappy with the results of the Premier, do not vote for his party which will make him become Premier once again and run the country…Oh did I say run!!! I mean RULE the country (as he thinks that Cayman Islands is a monarchy, and he is KING!) I guess that’s “off with [my] head” now!!!!

    • Anonymous says:

      Sorry, we weren’t aware that it was the UDP that won the last elections…nor were we aware that that meant that the majority of the voters wanted UDP. Thank you for letting us know that.  and by the way, we think the Mac is doing MORE than enough to bury his OWN a_ _ come next election. That makes it very easy for US…and by the way, Mac RULES people like YOU to the extent that you can’t possibly understand that you can make a better choice come election day. Now THAT is what I call RULING. How sad. Fortunately for us all, including you, he will NEVER rule all of Cayman that way. And by the way, whatever it is you are smoking should definitely be illegal, regardless of whether or not it is grown in West Bay.      

  16. Anonymous says:

    "Bush delivered the news about the country’s improving finances after explaining that the controversial deal with Cohen and Co had collapsed. He said government had been advised that the savings of approximately US$24 million on the bid recommended to government via the Central Tenders Committee would not be realized." CNS, what are you taking about in your article? The Cohen bid was not recommended by the CTC.

    CNS: No, that’s the point. The Cohen deal was supposed to have been US$24m less than the deal that WAS recommended by the CTC.

    • Son of Thunder says:

      After all the hype & self praise by the premier, his elected cohorts, & their few supporters (especially the UDP treasurer who called in the radio shows to “big-up” this “wonderful” deal), I find this shocking turn of events to be quite an “egg on your face” moment once again for the premier & the UDP. After telling the Cayman people that he took it upon himself to bypass the CTC for a better deal, this latest embarrassing revelation by the premier once again proves that this man acts before thinking, & it is hurting our country in all ways including image. It is time for him to ungraciously step away, step aside, go away, or resign! Please just go away, please.

      • Balanced View says:

        Only a fool or a dead man can’t change their mind. Clearly the financial position has changed since entering into the deal. Also the terms of the deal changed i.e. interest rate agreed upon couldn’t be gotten. Why would he still be going head long into the deal then?

        You don’t have to be so pro PPM that you stop thinking logically. Only someone with a God complex would still be going head long down the road you are suggesting the Premier goes down…I just can’t get the logic of you folks. Even in the face of this great news you are still chatting fart…fly a kite in a lighting storm why don’t you…you clearly are the son of thunder…

        • Anonymous says:

          Only a fool didn’t see this coming in the first place. McKeeva, in all his barely educated glory, decided he would bypass a strong local bid, recommended by the CTC, to choose a company with alleged personal connections to a member of his policital party that had NO experience with loans of this magnitude. And surprise, they couldn’t meet their end of the agreement. So we cancel the deal and tout it like it was an accomplishment? There never should have been a deal with Cohen in the first place! Quite frankly, this whole ordeal has been a blatant insult to the structure and function of our established gov’t by McKeeva and a slap in the face to those of us who actually support the best interests of Cayman’s future.

  17. Anonymous says:

    A surplus is good news…… for the Ministers!

    Shall we start a pool to see which Minister will be the first to organize an overseas junket with a large entourage to get that deficit back in place?

  18. Anonymous says:

    If it is true that the NY financiers were paid over one million dollars of our money in non-recoverable up front fees in a process that was contrary to our tendering rules, then those that signed the deal should be made to compensate the people of these islands out of their own pockets.

    • OMG says:

      Stop being stupid, the deal fell through because they Cohen couldn’t deliver…. its called breach of contract and govt doesnt pay (read it slowly you should get it soon enough) 

      • Anonymous says:

        No you should read the article properly! No mention of breach of contract was made. However, and try to follow this, the statement that was made said the arrangement had been terminated, which can lead to the supposition that any none refundable fees would remain just that NONE REFUNDABLE!

      • Anonymous says:

        OMG, check quickly what we paid up front!!!

  19. McCarron McLaughlin says:

    This is very a disturbing turn of events, another alarming news item in 2011 headlined by the Premier. One has to ask the question now that the Premier has shot himself in the foot again, why did the Premier went ahead in the first place and closed this deal without the country’s consent? XXXXX Can we hear from auditor general on this issue, we would like to know his opinion on the whole process? Because It’s obvious to me that Governor Taylor knew nothing of this arrangement that the Premier agreed with Cohen & Company when he was in NYC on other official business, I’m certain if he knew about it firsthand, he would have never requested that it be investigated by the office of the AG. This further demonstrates a serious gap in communication by the Premier with his collogues in Cabinet, one man should never be allowed such free reign to play cat and mouse with the finances of this country, just because HE thinks it’s good for the country. Mr. Bush vehemently defended his decision to surpass the CTC process and we must now believe this crap about Cohen not being able to obtain the rate previously agreed, these thingshappen when deals are made in a hurry without ironing out the finer details first. What Mr. Bush failed to mentioned in his speech is for Cohen to close a deal with a rate of 4.5% and not having any previous experience in dealing with sovereign debt would have been near impossible as the upfront fees and other expenses would have been immense. When the Premier says, "Sensibly, and with the country’s benefit in mind, Government chose the lower cost offer, to try and save 24 million dollars". This is hogwash he should’ve said HE tried to lower cost not his government – because it’s obvious they didn’t have a clue of what he did, when he did it, but yet they all sit there and agree with everything he does. I hope this government is making arrangement for their departure which is in short order, my best advice to this government is to start planning for life after politricks because it’s just a matter of time before this government is brought to its knees.

    • anon says:

      disturbing? nothing disturbing about having to owe another lender!

      • McCarron McLaughlin says:

        That’s correct this is very disturbing. I wonder if CNS can do a FOI request to see if any commitment fees were really paid when the Premier initially accepted this made in heaven deal.

        I know from working in the financial services almost 15 years now that once you commit on such a large loan that usually comes with a cost, unless there were some other underlying arrangement.

  20. Anonymous says:

    Come on now everybody just stop and think here why there is a surplus, ya forgot already? The transfer fees paid to government from the sale of the Courtyard Marriott by Dart. What happen to your all memory. Mr. Dart soon have us out of the red, I like that guy.

  21. Anonymous says:

    what a great magical surplus are we paying our bills?

  22. Anonymous says:

    They haven’t got a clue how much money they have or haven’t got! $17m surplus? Did someone figure that out on the back of a napkin?

    I’m not surprised the interest rate went up…”hi we have no idea what we’ve been spending our money on for the last 10 years and don’t know how much we have. It’s not going to be fixed for the foreseeable future, but can we borrow $185 million please?”

  23. Anonymous says:

    How can we believe anything Mac or “his” government say and how can we trust any of the words that come out of the Financial Secretary’s mouth?

    Time and time again we hear different stories, and bold statements and often retractions from this group! We have heard so many different stories and, I call them stories as so frequently they are proved to be fictitcious, that our “Financial leaders” must be the laughing stock of the world.

    You could not run a “fried Fish” shop the way these guys try to run the country’s finances!

  24. Anonymous says:

    If the new Auditor General, his name escapes me for the moment, should ever produce one report before his term expires, I hope that it would be a clear and concise explanation of what happened with this financing arrangement and who benefited.

    Then again, it was clear who benefited from the Turtle Farm financing and nobody was charged with any crime for that fiasco.

  25. Anonymous says:

    Everyone stop winning and focus for a minute!!! The PM has done tremendously well. If you look at what has brewed in the western economies over the past 2-3 years ; you’ll clearly understand. He initially SECURED a credit line for our then economically suffering cayman THEN took another strong step to RE-EVALUATE this credit line and decided that we DID NOT NEED TO BORROW in the end. i wish his wisdom was common to most of us. Then we wouldn’t be crying and winning all the time about what the government needs to do for us.What we need to ask is simply”WHAT CAN WE DO FOR THIS GREAT ISLAND-CAYMAN !!!!!!!!!!!!!!!!
    MAY God blessCAYMAN.

    • Anonymous says:

      The people must stop "winning"? LOL. You are a UDP supporter all right. This just shows that Mr. Bush shoots from the hip.  

    • Aaron Seth says:

      lol… And I am in laughter, because I recall how the blogs were at him for getting us in a big loan… now, he cancels one and they are all uptight about it. These critics are amazing!

      • Anonymous says:

        Isn’t it really amazing though, that some of us critics still have our brains about us? That’s more than we can say about some of our critics…Laugh on brother. Sufficient unto the day is the evil thereof.

    • Anonymous says:

      The fact that you and a couple thousand West Bayers have the same common wisdom is more than any country could hope for.

    • Anne on a Moose says:

      Or, he fannied around playing at being the big finance guy, in which he is neither trained experienced nor respected, and committed the country in principle with a private deal (not authorised by anyone but himself), only to later be forced to pull out. There will be costs on pulling out of the deal, and even greater costs in borrowing elsewhere at a higher rate than previously offered by the consortium approved by CTC.

      What do you mean we don’t need to borrow in the end? You wait and see. Bush’s wisdom my a@#! This was Bush out of his depth, as ever. He cannot be trusted with the country’s finances.

    • Anonymous says:

      The Premier CANCELED HIS OWN inappropriate deal to cover his own a_ _. IT DOES NOT TAKE A GENIUS TO DO THAT. WHY CAN WE ALL NOT SIMPLY UNDERSTAND THAT???

  26. Anonymous says:

    I am sorry but this is just non-sense..Where are they getting these numbers from?? We all know the state of the public accounts and the fact that no one is accountable or responsible for the accuracy of the accounts or lack thereof of and now we are projecting a surplus??!!!

    We have NO idea as to the true picture of accounts. They must be producing these numbers on cash on hand. So they are taking into account the large injection of cash for company registrations, license fees etc which we all know is a huge boost Jan-Mar but what happens with the second half of the year……………….

    Honestly, we need ACCURATE TIMELY results and we need someone to be ACCOUNTABLE for this entire process. It is embarrassing that as one the leading offshore financial centres we have absolute no control or idea of our true financial position.

    I guarantee in the second half of the year we are going to have a larger deficit than we had "forecasted"!

  27. ric says:

    McKeeva, keep up the good! Many can’t fathom right now, but they will soon see that their attacks on the government were a puff of smoke! Don’t let no one, the PPM, nor these bloggers discourage you from fulfilling your campaign promises to the country. The Governor on the news even said that you are increasing the revenue of this country and taking us out of debt. Way to go Mac!

  28. Anonymous says:

    The govenrments ‘surplus’ is unaudited and I for one am willing to lay any wager on it that if the accounts were ever audited that would not be the case. The fact that the accounts haven’t ben audited for so many years indicates that there is a lot of black holes and slush funds and the like used by government and nobody really knows what sort of state the finances are in.

    Any cost savings this year are due to the fact that there are two half built schools laying to ruins in North side that were orignally budgeted to be completed but the government have saved money by not building them, which sounds great in the short term, but means they will be spending more in future years when they finally get around to finsihing them off.

    Smoke and mirrors is the essence of all government activites. The accounts are made up of ‘projected revenues’ which still don’t take into account the thousands of expats who have gone home and the subsequent loss in work permit fees. By years end when reality hits home government will realise just how deep in the doo doo they really are.

  29. Anonymous says:

    I don’t blame the Premier for cancelling the deal. Also, the economy looks like it is improving by these figures.

  30. Robert de Banc says:

    So Mac’s banking buddy promised great things and failed to deliver anything.  Mac found bankers who do their job the same way he does his.

    • King says:

      And because Mac is so clever and knows what he is doing more than if Alden or Kurt was in… that is why he is going to make things better for these islands… 😉

  31. Anonymous says:

    The people of Egypt and Lebanon have the right idea.

  32. Anonymous says:

    Fool’s gold is what I call it. Instead of jumping willy nilly here and there, the Premier should slow down and read the fine print and consider the ramifications before jumping off and grabbing every little piece of fool’s gold offered. People these days aren’t like people of old when a man’s word was his bond. It is also why there are rules and procedures to be followed. While they may slow things down a little, they ensure fairness and hopefully, best value, as the decisions have to be carefully researched and analyzed. Hasty decisions are usually regretted and once again, we see what a hasty decision has brought. Just remember that everything that glitters is not gold.

  33. Anonymous says:

    What surplus? Remember the Auditor General has categorically stated that no reliance can be placed on any financial statements of the Cayman Islands. The governor and the Premier are relying on these same statements. The so-called improvements is a direct result of incorrect accounting. Today it could be a surplus, a deficit next couple months. It is the same people who provided financial projections to the PPM and we all know how that turned out.

  34. Anonymous says:

    and they can figure all this out with no up to date financials?  That is truly amazing.  Makes you wonder whether we were ever really bankrupt doesnt it.  Or was that just a ploy to make it look like this govt. brought us back from the brink.  I don’t see how we could suddenly have a surplus when work permit fees are down and we are in the middle of a recession? 

    • Anonymous says:

      surplus = reduced operating expenses = reduced CS salaries = SOON COME AGAIN!

      • Anonymous says:

        There is no surplus, there never has been and never will be, all it is is a manipulation of some unaudited (meaning unchecked and wrong) financial statements based on nothing more than guesswork amd good old fashioned BS.

        When the government do their accounts they start at the bottom line, write in the surplus figure they want to get and fudge the rest to fit. We can rely on any government accounts the same as we could on a chocolate teapot.

        This reudction in expenses is again nonsense. A few bucks saved by cutting CS salaries was swallowed up by the huge pay rises given to others. The continued refusal to cut staff numbers is preventing any meaningful savings from being achieved.

        The only reductions made in government is the reduction in quality of service and helpfulness of staff. Whenever you have the misfortune to have to deal with government at Immigration , Drivers licencing etc is a nightmare, dealing with undeucated, rude, incompetent and miserable people.

  35. Anonymous says:

    So now the question is, what is plan B, don’t kid yourself Premier, you will need to borrow and you’ll need to close that deal in the next 5 months. Perhaps plan B is to go check ma buddy Dart for some loose change.

    What a tangled web we weave when at first we try to deceive!!!!

    • jump-start says:

      Ummm… didn’t I see you laughing and having a good time at Camana Bay, enjoying the facilities??? lol…if the Premier and Dart relation is so bad, why are indirectly supporting Dart???

  36. Anonymous says:

    The rubber hasn’t fully met the road yet, I predict that by Monday of next week, the definitive proof showing who exactly brokered this deal in the first place will hit the media. I will then turn on my radio and listen for him to come on air again and explain to the Cayman Islands how he got his info via FOI and how he was acting in the best interest of the Country. XXXX

  37. Anonymous says:

    McKeeva needs to resign.

    • Scottish,Irish,Jamacian born CAYMANIAN says:

      Mckeeva should never have been appointed by his peers to lead this country……… (peers w/o a back bone)

      Mckeeva should never have been allowed to run for elections again in this country………

      Mckeeva needs to sit down, shut up & listen to those who can and will do the RIGHT thing’s that will benefit the PEOPLE of this country…….and thats that!

      STAND UP CAYMAN!!!…stand to F%%$ up!…enough is enough!…………

  38. Anonymous says:

    So the deal the CTC recommended was 4.786% from RBC and FCIB, the Premier’s deal (the details of which has been kept a secret until now) was for 4.5%. So is he trying to tell us, that the reason he broke the law and overuled the CTC wasto save .0286% of interest? Was that the substance over the process? was that the interest rate difference that was going to save the country 10s of millions?

    If I remember correctly, That was what Cline Glidden explained as the quantum of the savings on public radio, between 20 and 30 million.

    Now that the deal has fallen apart, all the FOI requests can he honored and I’m sure some very revealing documents will surface.

    • Anonymous says:

      I think you will find that the deal proposed was a cap of 4.5 pct not an actual rate of 4.5 pct. The FCIB/RBC was a fixed rate of 4.8 pct (approx).

      Implication being that savings in the initial years would be more than 0.3pct.  US 10 year rates are up 0.8 pct since this deal was initially proposed and its not really a surprise the rate has gone up.

      Bad form on Government that they got nothing for their money, (if they did have to stump up cash to get this going), good that we don’t actually need it.

      • Businessman says:

        Might not need 185 given that there is a small "surplus" but they will need at least 165, and my guess is that with US rates up in the last  6 months the offer from RBC/Scottia is off the table or at a substantially higher rate…

         

  39. Anonymous says:

    Money down the drain. Financing arrangements like these come with a lot of upfront fees which are non-refundable eg, legal fees, arrangement fees, syndication fees, commitment fees, underwriting fees, termination fees etc. I am positive a simple FOI request will put these fees at around $3 – $4 million. Remember this deal was supposed to save Cayman tens of millions. Imagine school supplies in jeopardy and pay cuts are the order of the day and money going down the drain.

  40. anonymous says:

    Once again our "Leader" bypasses the system to do what (in his mind) is best for the country. XXXXX Then turns around and claims it did not work out.  This is another reason to us the proper channels for tendering such things.

    Please give the government back to the people!!!!!!!!!!!!!!!!!

    • Concerned says:

      You cannot please some people no matter what you do. If you agree they have a fault, if you disagree they have a fault.
      What I suggest is that Cayman needs to seek God, because after in the long run what is there that is any better.

      • Pending says:

        Yep, theres the answer, perhaps YOU shuld be Premier and run the country.

        News flash: God isnt going to save the economy or this island. Go back to sleep.

    • Ebanks says:

      But if it DOES WORK OUT, then WHAT? It just shows that people like you can babble all day long and deliver a negative message at the same you are wrong and not on the side of history

  41. Anonymous says:

    that latest embaressing flip-flop and u-turn for mckeeva……. anywhere else in the world this would be matter of resignation but here its just another day in wonderland…zzzzz
    can someone tell me what this gov ha s achieved in the last 2 years?????

  42. Anonymous says:

    So the markets are viewing the CIG as a bigger risk now?

  43. Janelle says:

    Well it looks like we don’t need to borrow again. I think this government is bringing us on track. Anyone that thinks otherwise are just ungrateful and blind by party politics. I watch the Governor declared today that it looks like Cayman will have an operating surplus this year. Governor Duncan Taylor declared as follows on News27, "the figures at the halfway point in the financial year were pretty encouraging. Revenue was ahead of target and expenditure was below target." Again… "pretty encouraging"… this sounds good.

    Can’t wait to see UDP get re-elected.  ;o)

  44. MT says:

    CNS: The improvement in the state of the government’s coffers, Bush said, was not an accident. “The expenditure results being lower than budget expectations are a direct result of a conscious effort being taken across the government and supported by the wider public sector to restrain expenditures without jeopardising the quantity or quality of services offered to the public,” the premier noted, as he congratulated the public service for its efforts.

    The Premier should also be congratulated for his efforts to bringing the economy around. He and his family has endured not only alot of criticism, but threats from certain members of the public. Despite their opponents, one thing is said about the UDP, they stuck to their guns, and will continue to do so!

    • Anonymous says:

       Yes and all this has been done with no up to date audited financials.  Before the end of the last Govt.’s term we had a surplus.  The same financial secretary a few weeks later claims we were bankrupt which the Premier told the world about and had everyone in a panic. Do you wonder why no new investments are coming in?  Investors are leaving because they are too smart to listen to the rubbish that is spouted by this govt. If there were up to date audited financials to prove all of this, we would be in a much better position.  What the leaders forget is that they are years behind the rest of the world.  They can no longer spoon feed absolute rubbish to those of us who are not stupid and expect us to believe this.  Show us the proof and we will believeand support.  Hide the truth and we will suspect the worst. 

  45. dumb American tourist says:

    Funny how some words have very different meanings when viewed in diffferent countries. For instance the word Government in America means by the people for the people. In Cayman it means something entirely different unless the people you are talking to happen to be employed by said government. Other words that come to mind: Premeir, Honorable, education, transparent and promise.
    , Also interesting that in Cayman Government can act in the countries best interest by cancelling a deal made by the government that had not been approved by Government there by showing all that Government is working in (the peoples?) best interest.
    Also of note is that government companies are showing anything of value when it only has the say so of said government as to what it actually has.I hope this really makes sense to Caymanians because this American is confused. (And glad to be an American)

    • Anonymous says:

      This government is a joke, & the biggest joke of the government is the premier (otherwise known as “flip-flop”). How many flip-flops does that make it now for the premier? What an ambarrassment he has become.

      • anonymous says:

        Flip-flops are necessary for making the right decisions. At times, due to circumstances, you have to change your mind alot. We are talking about running a country – not a house! In the end, for a man that doesn’t have many advisors like Obama, I think MB is doing a good job.

  46. slowpoke says:

     

    I quote: 
    “government had cancelled the arrangement”, “deal with Cohen and Co had
    collapsed”, “cancelled the deal”… 

    Get your cheque books out Boys and Girls,
    those NY lawyers will be asking for big bucks.

    • Anonymous says:

      my friend, that cheque book has already been out, Cohen and Co got paid $1.5 million for this deal and delivered nothing, who’s going to get that money back for the Government is the better question

      • Anne on a Moose says:

        Are you sure? I didn’t see that anywhere. If the premier did do the deal with penalties for non-performance by CI Govt. (and without any CTC approval or anyone else’s) we need to know more.

        • Slowpoke says:

          I suggest we bookmark this page and set a reminder in Outlook, for one year from now.  If I was wrong, I will be the first to apologize, but I think those of you who believe that they were paid enough and we can just move along are in for a surprise. 

    • Anonymous says:

      Not if Cohen and Co couldn’t meet their obligation to finance at 4.5% (unsurprisingly, which is why they never should have allowed to finance in the first place). If they had met it, then they could claim a breach on our side.