The Government has announced plans to launch a new short-term debt security on July 22 via a $150 million offering to institutional investors. RoyalFidelity Merchant Bank & Trust, the Government’s lead advisor and placement agents, had revealed earlier this month that the upcoming $150 million issue will be evenly split between 30-day, 90-day and 180-day Treasury notes. Reportedly, the debt securities are designed to replace the existing Treasury Bills as the Government’s main source of short-term funding.

Over the past fiscal year, the Bahamas Government Stock (BGS) issues raised $200 million in longer-term financing for the Government. The BGS is a replacement for the [Bahamas Government Registered Stock](http://www.centralbankbahamas.com/market_bgrs.php) (BGRS), just like the Treasury Notes are intended to be a replacement for the Treasury Bills.

Only Bahamian broker/dealers and commercial banks can participate in the offerings, with their customers subscribing for the short-term bonds via these institutions. Minimum subscription is set at 1,000 notes, or $1 million. Unlike the BGS, the Treasury Notes will not be listed and traded on the Bahamas International Securities Exchange (BISX). They will instead be bought and sold on the over-the-counter (OTC) market at prices that will include interest earned.
Michael Anderson, President of RoyalFidelity Merchant Bank & Trust expressed optimism that the Treasury Note launch would be fully taken up given the *“very strong level of interest”* expressed to-date by Bahamian commercial banks. These institutions are sitting on more than $1 billion in surplus liquidity that is seeking an investment return home.

Mr. Anderson notes that the Treasury Notes, together with the longer-term Bahamas Government Stock (BGS) security unveiled last year, herald the introduction of more market-driven mechanisms to satisfy investor and government objectives. *“I think the introduction of BGS, and these short-term securities, will help investors find good, solid, low-risk investments that give them reasonable returns and get them outside the limits of the banks,”* he says.