Mac: $55M lost with Cohen

| 16/11/2012

Mckeeva 1_1.jpg(CNS): The premier said had his government gone ahead with the Cohen loan last year it would have saved $55 million for the public purse. McKeeva Bush made the claim about his efforts to borrow money to balance government books in an unconventional manner as legislators returned to Legislative Assembly Thursday. Bush, who was the one who pulled out of the loan deal, said that, given the current base rate of US Treasury bills, it was conceivable that if Cayman had accepted the Cohen offer of a floating rate it would have resulted in an effective interest rate of approximately 2.7% compared to the 6% it was currently paying.

“With the current state of the world’s economy, and given the fact that the US Federal Reserve has now decided to increase the monetary supply in its economy by buying back its bonds at a rate of $40 billion dollars per month over the next few months, it is conceivable that the Treasury Bill Rate is more likely than not to decrease,” he told legislators, as he pointed to the low interest rate that the government could have got with Cohen has it borrowed money from the finance house instead of the bank, as it eventually did.

“The difference in interest cost is approximately 55 million dollars,” the premier claimed. He said the issue was down to risk, “much like everything else, but the wisdom in doing so should be based on the assessment of the global economic outlook.”

Bush said the expectation that interest rates would continue to remain low, and the extent that the Cayman could have benefited was reasonable, and “based on sound economic and financial analysis – even if I have to say so, since it appears that those who criticize me is devoid of such understanding.”

He said that these people, whom he did not name, through their lack of understanding had cost the Cayman Islands a significant financial loss. “It is my firm belief that we should still pursue every angle to obtain financing for our debt, in the manner I have proposed in order to save this country millions of dollars.”

The idea to pursue the Cohen loan was dropped by the premier after the unorthodox approach created something of a political firestorm. 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 was terminated by the premier in February.

At the time Bush said the 4.5% interest rate capwhich the firm said it could get had not materialised and government had cancelled the arrangement. He said government had been advised that the savings of approximately US$24 million would not be realized.

“Key amongst the representations made to government was that a4.5% 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 at the time as he explained why he had originally opted for the Cohen deal 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 at the time.

The circumstances surrounding the deal formed part of a report by the Office of the Auditor General, which concluded that the government wasted around half a million dollars by veering off due process in its efforts to finance government borrowing.

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  1. Anonymous says:

     Lest we forget – the reason the Cohen deal was not done was because the decision made by Premier Mckeeva Bush, Minister of Finance to go with the New York-based financing firm, Cohen & Company, was not in compliance with the financial regulations of the country’s Public Management and Finance Law – according to the Auditor General, Alastair Swarbrick.  

  2. Anon says:

    Wake up Mac. You really want to know why so many people despise you? Hate you, like the disease you are?

    Because we are suffering whilst you WASTE money that we cannot afford to ‘give’ you. You are a disgrace to this country. A Marie Anoinette in a starving France. A pol pot in a Cayman khrmer rouge.

    I am a single mother. I am blessed (and not by your church, of the holy selfishness) to have a job. I make 3800 USD a month. That is 3116 CI,. From that I a used to be able to pay my bills. I didn’t have any left over, but at least my kids had food and a small Christmas present.. Maybe once a Month I ‘d treat us to a pizza. No more. Now thanks to YOU we can’t even afford gas to get to work. Our water is being turned off, and hey, you are flying first class on another mission to waste MY CHILDREN’ S money.

    Shame on you!

  3. Anonymous says:

    Things are bad, but Mac never lost this money himself – those top civil servants who handle the day to day operations are even mor eto blame as hey are the country's watchdogs — more like brownnose poodles tehse days!

    So too, the Ritz offer of a $6million check – they never send the message to Mac's house – but to the government offices who should have been happy to collect this – but the DIDNT!.

    But then again, why do that when they can simply hit the civil servants with another pay cut.

    Yes, many could go (esp expats) but much of the civil service workers are mostly hardworking blue-collar foundation of Cayman!

  4. Anonymous says:

    Mac, pls go on another trip


    ( a long one ) we are tired and fed up with you !!!!!!!!!!!!!

  5. Anonymous says: would have save $55 million when compared to the Sh888ty deal you did ink because you were focused on the Cohen deal and would not take off the blinders because the real big boys of international bond issuance were not going to risk *going dirty* and paying fines out the wahzoo to NY AG.

    So,  any right minded 'deal' would have put the country ahead closer to the $55 million you speak of but substance over process

  6. Anonymous says:

    Is it any wonder that we are in such financial trouble. I would expect better arithmetic from Kindergarten children. Is this the reason why the PPM thought that they had 85 million in reserves????.

    Who are we paying inside the Finance Ministry to come up with all this nonsense.

  7. Knot S Smart says:

    This $55 million brings the total to $2.05 billion that has been lost or wasted since Mac became Minister of Finance!

    Dont worry – our great grand children will pay the cost of our 4 years of Mac-in-charge-of-the-country…

  8. Anon says:

    Mac-a-matics, always good for a giggle!

  9. Anonymous says:

    You've got to hand it to the guy for trying, he manages to hang himself in the process, who was overseeing the HSBC bond issue at 5.95 fixed, who agreed to it, what idiot thought 5.95 was a good deal?  It's trading sub 4% right now, which means, all things being equal, you could have fixed the debt at much lower rates, or waited and done it at sub 4%. I know rates have tanked since it was issued, but ask anyone (other than HSBC) where rates were going and you would have got a pretty clear answer.   Should have arranged an overdraft at the local banks and floated the fixed bond in tranches on the way down, in fact you should be floating more now to pay down any debt out there.  Ask the UK treasury, they've got heaps of experience in issuing debt!


  10. Anonymous says:

    I just thought of a new word: Bushit

    • Dred says:


      Maybe we can sell it and get royalty fees for 55 mil or arleast 750k in consultancy fees.

    • Anonymous says:

      Bushit:  the name of the tribe in Grand Cayman made up of individuals who vote for and agree with the "honorable"premeir Bush and are given jobs, paved driveways, gas cards, richer churces, healthcare, access to a pension before you retire, and many other non auditable gifts in return.  They are at the recieving  end of the money vacume that is CIG.  They are Caymans "Intitled".  

  11. Anonymous says:

    55 is a useful figure.

    It goes like this –

    Four fingers and a thumb on my left hand and four more fingers and a thumb on my right hand = 55.

    All picked out of thin air and just like all the other financial data this government is producing – complete BS. Who writes this c**p?

    • Richard Wadd says:

      Apparently a fellow named ‘Jefferson’, who appears to be stricken with a rear affliction causing him severly inverted-vision.
      He especially has problems differentiating between 18 & 81 (million no less).

  12. Reasonble doubt says:

    Oh….and I just plain forgot to reply to the new owners of Ritz Carlton. What's the big deal that was nothing. Compared to what I might have saved in another instance. Which I couldn't give you the full details of because you weren't entitled to know.  That was between me and God and Cohen. And the China Harbor deal? That was something I was working on in private. That might have worked also. There are a lot of things going on behind the scenes which I am eventually going to tell you about….and some I won't…. BUT… If I had Supreme Powers…..

  13. Anonymous says:

    I'm headed down to West Bay for the Pirate's Week festivities. I'd gladly pay $10 to have my picture taken with McKeeva in a green suit tied up on a stick.

  14. Another Anon says:

    Let's leave the arithmetic to those who can actually count, now shall we Keevy?

  15. Anonymous says:

    I am totally baffled how a country like the Cayman  Islands, ranked as the 5th largest banking institution IN THE WORLD, can somehow elect a leader, who becomes the country's Premier and minister of finance, and who barely has a high school diploma (if indeed he graduated from high school). No wonder there is so much trouble with the country's finance. The minister of finance can't count and knows nothing about finance. No wonder the Auditor General gets so many unqualified reports from the various government ministries. Place the blame at the top. Get a QUALIFIED person to run the country's finance. The problem with Mr. Bush is that he is so full of himself (full of sh-t really) that he doesn't know that he unqualified. Anyone  who doesn't know that they are ignorant of financial matters is a dangerous person to be placed at the top of the financial industry. Wake up people. Stop trying to get a donkey to perform as a race horse. It would never happen even if you have the best trainers. Time to get a real horse (leader).

    • Anonymous says:

      "I am no financial expert." — McKeeva Bush (a direct quote from a year or two ago).


      At least, in this respect, he is honest.

    • AnamusedbutsadCaymanian says:

      Now to be fair to the Minister, 'I am totally baffled how'  ………………from what I hear he IS highly Educated in 'Environmental Engineering' (He was a Janitor at one of the Banks)…… I am sure he must have picked up a thing or two whilst mopping the floor (nothing wrong with that – a good honest living)…… [and honestly, I didn't mean he picked up garbage] ……..  just saying.

      OK, he didn't quite learn how to adapt his twang to fit in with those big UK and other Country Meetings where he may have 'CHEENGED his WOTE' instead of 'CHANGED his VOTE' but I, as a concerned Caymanian,  think that his expertise with a Mop and Bucket should havestood him in good stead to 'Clean-Up' the mucky Economy.

      By the way – I'm a Caymanian who knows when to say 'CHEENGED' and 'CHANGED' and I can swap it up with the best of them (Limeys, Yanks,  My Homies,  or whatever)…….  Do you think I'd stand a chance at running for Governor ??   ( I have a degree too!! and it's in Finance 🙂

    • Jonas Dwyer says:

      Why does everyone that comes here and have a good life, think that they have the right to call our Leaders horse  donkey etc.  Perhaps the writer would like to mplace his name in response so we all can see who has so much disdain for our. leader and indeed our country.

      Go away little boy or little girl or publish your name.


      • Anonymous says:

        Why does he or she have to publish their name in order to post a valid comment in your mind? “Little” minds need to focus on the disasters of our poor leadership rather than attacking the messenger who brings the reality to light. However should you be one of those feeble-minded people who feel they have to differentiate the resident population between, Caymanians, expats, paper Caymanians etc. in order to feel more superior to the other poster, you must feel pretty insecure about yourself. Truth Hurts.

      • George W says:

        OH YEAH!  YOU"RE "Jonas Dwyer"  and  I"M "George Washington".


        By the way!  It was your "INCOMPETENT LEADER" who started referring to us

        [his constituents] as DONKEY FACES. So if you have any real concerns about what this

        man is doing to our country, you should insist on him getting a proper "psychiatric

        evaluation". Because it is my  personal opinion that  the man has "LOST HIS WAY" and

        worse yet, he has surrounded himself by a bunch of"MUTE GUIDE DOGS" who are unable

        to alert him even when they see he's about to be hit by "THAT "MAC TRUCK" coming down

        the road.  


        And one more thing, if you want to know the "new meaning" of the word "INCOMPETENT" 

        it is listed in the newly published Unabridged Webster Dictionary as: 



  16. McCarron McLaughlin says:

    These poli-trick-ions are worse than a tumor, they are a cancerous bubonic plague.

  17. Anonymous says:

    I just called Cohen & Cohen to discuss a loan. They told me that I had come to the right people since to begin with I would be getting "two for the price of one" when compared to getting a loan from Cohen.


    Then, as requested by the Premier, I decided to go hog-wild and ask what it would cost to borrow $50,000,000 with no interest and no repayment ever. Surprisingly, they said a $50,000,000 loan with no repayments ever could be made as soon as I provided them with the $55,000,000 commitment fee. An dem foo foo people say we don't know finance.


    The donkey-faced people who were eating carrots and drinking milk got the Premier so mad that after shuffling his papers he mixed up "prime rates" with "crime rates" and "LABOUR rates" with "LIBOR rates", and with Rollie atthe wheel, the economy turned around so fast that it spun out on wet road and ended up headed in the same direction that it had been going all along.

    • The Crown says:

      Clever..!!! "I like it alot" Guuuuuuummmmmmmmmpppppppppppppp!!!!!!!!!!!!!!!! Your a goddam genius!!!!!!! Fa real dough..

  18. Anonymous says:

    Thanks a million Mac baby…or should we say fifty five million? All along you had the world believing it was only $450,000.00 you flushed down the drain and now you're telling us it was that plus fifty five million? You should have waited until AFTER you lost the election to tell us that.

  19. Anonymous says:

    Mac and his buddies did get a free trip in a fancy private jet.  Which was nice.  For them.

    • Anonymous says:

      And that is the criteria for every piece of business this government does!

      The UDP Four Way Test:

      Is it nice for me?

      Is it nice for me?

      Is it nice for me?

      Is it nice for me?

  20. Anonymous says:

    We lost $55 million, you say?! Wow! That’s terrible! BTW: Does that include your “finders fee”? Only from the wonderful world of Mac Maths could these kind of figures come!

    • Anonymous says:

      It's not a "finders fee" my friend. It's called a "real estate services" fee. If you don't believe me just ask Richard.

  21. Anonymous says:

    "“It is my firm belief that we should still pursue every angle to obtain financing for our debt,"


    Uh, Mr. Bush, perhaps a better way of financing the debt is to spend less so that the debt can be paid down.


    Please start by cutting your travel budget. It is apparent that you have never hear of teleconferencing; it is very cost effective when compared to first class travel to five star accommodations with a large entourage.

    • Anonymous says:

      You can not do your Private Banking by teleconferencing. In order to do Private Banking you must travel to the Banks irrespective of their locations.

    • Anonymous says:

      Did anyone make it to Macau???

  22. Anonymous says:

    It is "conceivable" that……but it is actually true thatthe CIG LOST money, and its the actual upon which you should be judged!
    What all of us want to know is who made money on the side of this deal, arrangement fees, intro fees or whatever, if the answer is that nobody did, then fine, but personally I doubt that! Thats what due process is for, I guess that is why Bush doesnt want it, so thank heavens for the FFR, regrettably too late for the Cohen debacle!

    Sorry, posted this to the wrong headline!

  23. Anonymous says:

    Thanks again McKeeva Bush. Another $55,450,000.00 down the drain. We love you from the very heart of our bottoms.

    • Anonymous says:

      Politics rearing its ugly head again, this deal was clearly DOA, the facilitators knew it, the Auditor General also in fact everyone with good common sense knew it. 

    • Dred says:

      and wallets.

  24. Anonymous says:

    So there never was a "Cohen deal" even in Mac's deluded mind.  There was an attempt to negotiate a floating rate with a cap and they could not agree a cap.  So what was on the table seems to have been pure bond speculation by a public entity.  The world is full of public bodies suing sellers of products which promised great returns and ended up producing really large losses. 

  25. Anonymous says:

    This man is uneducated! So that leaves him lost in space & taken advantage of by the smarter one!


  26. Anonymous says:

    Haha…you guys lost $55M but don’t worry about my public spending and the huge unnecessary civil service…forget that stuff! Lol what a joke!

  27. Anonymous says:

    Someone please hut this baffoon up!

  28. Anonymous says:

    This guy is unreal. He puts us into all kindsof bad deals and then pulls out of a good deal and loses $55 million of our money. He should be made to pay it back. Can we please have the elections tomorro?

    • Chris Johnson says:

      Hindsight is a great thing Mr.Bush. Perhaps you would care to comment on the First Cayman Bank fiasco. I really think you need to leave banking decisions to the experts and concentrate on real estate valuation work where apparently you are also an expert.

      • Dred says:

        Damn I love that shot.

        But I thought the whole thing was Cohen and Cohen could not IN THE END live up to what they were proposing. Was this not the case? If so why is this even being spoken about. Can't save what was never there to begin with.

    • Dred says:

      Never was there to begin with. He's just saying that with NOTHING concrete to stand it on. Last I heard Cohen couldn't hold up their end in what he relayed to the people.

      So…saying that it's a waste of time to speak of BUT he has to have something to say to prop up his pathetic administration.

  29. The Crown says:

    What?! The Public "Purse" must be a forty foot container. Ever wish you had a pot big enough to boil two legged crabs?

  30. Anonymous says:




    • Anonymous says:

      The fact that they are both capable of carrying their own bags and wouldn't need an "assistant" to travel everwhere with them would be enough reason to vote for them.

    • Dred says:

      Or maybe the Barefoot Man and Andy Martin.

  31. Anonymous says:

    Every idea is perfect in retrospect..however per my non-supported computations had the world known what a complete XXXX idiot big mac was…and how he would destroy the reputaton of a once sophisticated financial center…we would have had to pay 72% interest..

    • Dred says:

      Had we known what an idiot he waa we could have saved Cayman several hundred million. Actually we did know so why did we do this again? oh yeah West Bay!!!

      • Anonymous says:

        Well, I for one can now say that a country does not have to go the way of independence to be totaly screwed up. The Turks did it, and here we go, full speed ahead off the cliff.

        With the next election fast approaching, I hope that those who seem to think, or thought, that this practise of electing people based on their promises will put a little more Gray Matter into the process.

        Sigh, I can dream I guess.

      • Anonymous says:

        …and George Town and Bodden Town

    • Anonymous says:

      Well, if West Bayers didn't have long term memory problems then we wouldn't have this problem.  After all, he brought down First Cayman Bank.  I would never elect someone to office after they did something like that.  He shouldn't even be allowed to run for office.