Mac tried more loan deals

| 05/07/2013

mac signs japan_1.jpg(CNS): Despite the controversy surrounding the former premier's failed attempts to cut a deal on government's debt outside of the tendering process with Cohen and Co in October of 2010, documents released following an FOI request have revealed that McKeeva Bush made further efforts in his last months as premier to re-finance the public debt. Bush selected the assistance of a local finance expert to seek possible refinancing deals outside of the tendering process and signed at least one engagement letter without the knowledge of the financial secretary or approval from the UK. None of the potential deals resulted in a re-financing package but they could have cost the public purse at least $300,000 in fees. (See CNS note)

According to partially released documents following a request by CNS, email correspondence between the finance ministry staff shows that Bush had initiated talks with local attorney Wilton McDonald of FINAB Legal Ltd, who in turn solicited the services of various financial institutions in efforts to cut a new loan deal. Between June and November, the correspondence indicates that government made preliminary arrangements with Morgan Stanely and Caledonian Bank on the instructions of the premier to examine the possibility of re-financing a significant portion of government’s debt currently held in bonds.

This led to Bush signing an engagement letter in September with Caledonian Bank which proposed to undertake a bond offering at an interest rate of not more than 4% for up to $400 million to replace the government’s current bond. The former premier did so without the knowledge or approval of the UK or local officials and without going through a tendering process, despite the advice offered later by technocrats.

Although none of the proposals ever resulted in a successful re-negotiation of the government’s debt, Caledonian issued an invoice of $300,000 to the public purse based on the letter signed by Bush for the work it had undertaken in pulling together possible deals. The agreement had also provided for the bank to claim additional expenses where appropriate, although there was no indication from the documents released that any further funds were claimed or paid.

The correspondence shows Bush had mentioned the possible re-financing plan to the UK in a meeting with Overseas Territories Mark Simmonds but the proposal to repackage the financing was not shown to the FCO formally until after Bush had engaged and signed up with Caledonian.

Despite telling Caledonian and McDonald that he had already received approval from the UK to re-issue the bonds and repackage the public debt, it became apparent from the internal communication that this was not the case. While Bush had mentioned the matter to Simmonds at a London meeting in 2012, ahead of his trip to Greenland, it was said to be merely “in the margins of the meeting”, according to the documents, and not on the agenda. The engagement letter and proposal was not shown to the FCO until later in October.

However, the redacted records imply that Bush had still engaged Caledonian for a retainer fee of $300,000 and a success fee rate of 1.7% of the value of the bond offering. The deal appears to have been scuppered by the UK as a result of the premier’s decision to circumvent the official process, but because the ministry has withheld certain documents in the FOI response, it is not clear when the FCO pulled the rug or on what grounds.

The records released also show that Caledonian had agreed to establish an educational trust fund in Cayman with a seed donation of $500,000.

Following what appears to be the refusal of the UK to support the deal, Caledonian made a further offer in November, in which the bank cut its success fee from 1.7 to 0.75%. However, some two weeks later, the premier was arrested in connection with various offences, which are now proceeding through the courts, and it is not clear what action was taken on the revised proposal or if the local authorities began a process to refinance the current debt via an open competitive tender.

While McDonald appears to have acted as the introducer and some form of agent in the process, it is not clear if government paid any additional fees to the local lawyer.

CNS has made a request for an internal review regarding the request to include further correspondence to the UK among other documents which have been withheld and redacted.

CNS note: The finance ministry confirmed Monday 8 July that an invoice sent to government for $300,000 for that bank’s services, as per the engagement letter signed by Bush, without the knowledge of the UK or local ministry officials, was never paid. Wilton McDonald also contacted CNS and stated that he had taken no fees for his services in arranging the negotiations with Caledonian.

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  1. Cayman Voter says:

    Mac is no longer relevant.

    He is nothing but an expired tyrant who is now powerless.

    When he speaks no one should listen.

    New educated, technically experienced representatives are taking the helm, leaving reps like Mac as a footnote in our history.

    Let’s move forward past this sorry chapter in our lives and embrace the bright future.

  2. Voice of Reason says:

    It's embarrasing that this man keeps getting elected to represent the people of Cayman. Make us look like fools to rest of the world

    • SSM345 says:

      I think those that voted for him should be made to relinquish their voting rights.

  3. Dred says:

    I only hope gets EVERYTHING that's coming to him AND THEN SOME

  4. Michel says:

    McKeeva should not be allowed anywhere close to the LA. If there, gag order. He’s good.

  5. Anonymous says:

    This article reads a lot like the "financing deals" that surrounded the funding for Boswains beach. There were lots of posh consulting fees that showed no value for money.


    You gotta remember your history or you are doomed to repeat it, again and again.

  6. Anonymous says:

    As detestible as this character may be, now is likely to be the best time we'll see in our lifetimes to refinance and restructure bad loan terms.  The conditions that prevail today willcertainly be better than in the inflationary years hence when we face massive bullet payment maturities coupled with lower traditional government revenue streams.

    • Anonymous says:

      Perhaps you neglected to read the email from Caledonian where it states that the current 5.95% bonds have no "callable" features. That mean that the current bond holders, and in this case its lots of them not just one, would have to agree to the refinancing.

      Just imagine that you put money on term deposit with your bank at 5.95% interest for 15 years, and now your bank tells you that they would like to give you 4% instead but you have to agree to it. What are the chances that you would agree to a new lower rate?

      • Anonymous says:

        Well they may also say: agree or we might default. Like having a gun held to your head, the if the choices are tough but limited, eventually they will agree the lower rate.

  7. Anonymous says:

    CNS: you should compile all of the wasted money that Bush lost from us, the people, while in government, i.e. the millions lost on banks deals, failed port deals, etc.

    Good riddance.

    • Anonymous says:

      Not just for Bush but for past governments as well! 

    • Anonymous says:

      And (((((((((((((((((((((((  do not forget stopping of the hospital, the planned road corridors which costs us millions of $$$$$$$$$$$$$'s more to construct now. This man and his croonies have cost this country billions of $$$$$$$  in waste and it will continue to cost us for several years to come. I am a Westbayer most of us are hard working decent people and this fo fo have embarrased us for decades and there seems to be no stopping him. WHY, why ???? …….          was he not of the imfor mas of the puratemp fa, la la still go-ng on 

  8. Anonymous says:

    This man hasvthe IQ of   Conch and we still allow himbin Government House. 


    • Anonymous says:

      You grossly overrate the man. A conch knows how to not disgrace itself.

  9. Truth says:

    The fact that he did that, continued to do it , and now is still in a position of trust and can do it again shows that Bush is just the tip of the iceburg that is Caymans failing.

  10. Anonymous says:

    Refinancing debt at historically low interest rates is not a bad plan. It's all the secrecy and expensive middlemen XXXX that are hard to understand.

  11. Anonymous says:

    How one man can destroy the reputation of  an island.

  12. Anonymous says:

    I see the "new" Caledonian is involved.  Hmm no wonder so many sponsorships have been flying around town.  Seen this movie before.  The late Mr. Walker would not be impressed.   

  13. Anonymous says:

    This goes to show that the Constitution needs revision to place some checks and balances on politicians powers.  Politicians should never be allowed to ignore laws and procedures and incur reckless debt without suffering a significant penalty.  Civil Servants should also have some mechanism to allow them to put the brakes on politicians when they know, or see such breaches about to occur. 

    • Hoping for better days says:

      Bush was not responsible for the constitution, that was PPM. And THAT is the irony folks.

  14. Anonymous says:

    There aught to be a law allowing for Public Flogging of politicians who break the rules and squander government's money.  Mac deserves a flog for every $1 he cost the government.  His actions have been most disgraceful and unacceptable.  I cannot find words to describe the disgust and abhorrence I feel toward him.


    I strongly recommend putting a statue of Jackass with a replica of Mac's head on it in Hero's Square so everyone sees what a Jackass we had for our first Premier. 

  15. Anonymous says:

    big big bamboo

  16. Anonymous says:

    Hopefully the ACC will be causing new charges to be brought against Mac for this!

  17. Anonymous says:

    PAY IT BACK, JERK !!!!

  18. Anonymous says:

    I see from this story that as part of this deal that Caledonian was going to provide $500,000.00 in seed money for a educational institution. I have to wonder was anyone in this deal providing any money for any Honorary Doctorates. Just wondering that might answer some questions?

  19. Anonymous says:

    He's a madman, idiot and crook…but those who support him and re-elected or ran with him in the elections are just the same. SMDH

  20. peter milburn says:

    Carnival time continues.My my what a mess we are in and it gets worse by the day.Any chance that money can be put back in the public purse?Ha Ha What a dumb comment.Shame on me

  21. Anonymous says:

    Mac says that it was the additional powers forced upon him by the new Constitution that made him do it.

    • BORN FREE says:

      Dictators & tyrants believe they are above thelaw, even when under investigation. We better thank our lucky stars that he & the UDP did not win the May elections, can you imagine 4 more years of that!

    • Flip Wilson says:

      Nah.  Da devil made him do it!

  22. Anonymous says:

    Say it ain’t so, Wilton.

  23. Anonymous says:

    The title should read, "Mac Spends Another $300,000 Without Approval, Nothing to Show For It".  That just about sums up his governance.


  24. Anonymous says:

    Additional "Abuse of Office" charges coming?

    • Anonymous says:

      And he still is in office and won't be going to court till 2014…why so long, why is Joey going now and Mac not until 2014????

    • Anonymous says:

      Yes but they've been put off until 2050.

  25. Anonymous says:

    It keeps getting worse and worse.  I hope the Anti-Corruption Commission is reading this forum.  Mac had become like a African dictator dealing in the shadows with shadowy characters, pillaging the country while blaming imperialism and proclaiming "love for the people" while robbing them blind.  What he and his cronies didn't figure on was the fearless work of CNS and Ezzard Miller.  Hopefully this sets him up perfectly for his next career – "freedom fighter" from Northward.  Every good prison needs one.

    • Centrist says:

      You are spot on with your comment!

    • Anonymous says:

      The worst part of all is that we seem to still have at least ten brainists among us who continue to support him.

  26. Anonymous says:

    sounds like the big man led some people on to beleive he had authority to do something which he didnt..surprise surprise! anyway good thing that nothing came of all this and I hope that nothing was ever paid to anyone for anything from my tax dollars as a result of this.

    • Anonymous says:

      Are we sure nothing was paid? The article states that Caledonian invoiced the CI Govt $300K.

      • Anonymous says:

        The records released also show that Caledonian had agreed to establish an educational trust fund in Cayman with a seed donation of $500,000.

    • Anonymous says:

      How stupid are you? WE paid $300,000.

    • R. U. Kidden says:

      "Nothing was ever paid to anyone from my tax dollars."

      Holy mackerel!  Are you kidding?

  27. Anonymous says:

    What an idiot.

  28. Far Canal says:

    Its a gift that keeps on giving, unfortunately.

  29. Anonymous says:

    Blah Blah Blah.  CNS you are evry quick to publish this but very slow to announce the changes to the CIAA board.  XXXX

    CNS: We haven't posted an article on the new boards yet because Wendy was on vacation for a week, not because of any reluctance on our part to do so. I (Nicky) have been covering everything as far as possible from Cayman Brac but it's not ideal. As soon as we get this information, we will cover this story.


    • Anonymous says:

      Get a life blah, blah blah. Being kept informed of alleged fraud is more important than who sucked up to their favorite politicians to get a position on a Board.

      • Anonymous says:

        Can we please throw blah blah blah in the can with him?

      • Anonymous says:

        Really I thought conflict of interest regarding boards was a big issue a few months ago.  You better do proper investigations before talking.  Chairman and deputy chair of new board have big conflicts.

      • Anonymous says:

        sometimes I wonder if the people of West Bay, in particular those who vote for this man, read this sort of stuff. I am going on the assumption that they can read of course. I dear continue to dream….