Now Goldman Sachs indicated that it was the right time to float sovereign bonds in the international market as there was an upward trend in bond prices
Goldman Sachs, a US-based investment bank, has offered the government to raise $2 to $3 billion fund from international bond market by issuing sovereign bonds for infrastructure projects like Padma bridge.
The visiting high officials of Goldman Sachs made this offer at a meeting with Finance Minister AMA Muhith at the Finance Ministry Auditorium yesterday.
Prime Minister’s Economic Affairs Adviser Dr Moshiur Rahman, Energy Adviser Tawfiq-e-Elahi, Bangladesh Bank Governor Atiur Rahman and Finance Secretary Mahbub Ahmed were also present.
Ryad Yousuf, the managing director of Goldman Sachs, UK, led the delegation at the meeting. The other two members of the delegation were Johanna Dunn and Paul S Rose.
After the meeting, the finance minister told reporters that they (representatives of Goldman Sachs) said the infrastructure fund might be raised to $5 billion if negotiations with Bangladesh continued smoothly to float bonds in the global bond market.
Now Goldman Sachs indicated that it was the right time to float sovereign bonds in the international market as there was an upward trend in bond prices, he said.
“The representatives of Goldman Sachs have given us good information in the meeting that most of the countries are now out of the global recession. So, the demand for Bangladeshi bonds will be lucrative in the global market.”
Goldman Sachs had helped Bangladesh make its economy stronger, he said. “They also closely studied Bangladesh’s economy when we planned to float sovereign bonds last year. But we could not float due to different reasons.”
The World Bank criticised the floating of bonds in the international bond market, but we had informed the WB and ADB of floating bonds in the international market, he said.
In November 2013, Goldman Sachs included Bangladesh among the next eleven economies identified for having great opportunities for investment in foods and beverages, technology, textiles, leather tanning and real estate.
Goldman Sachs representatives said it would take time to raise the project loan from the sovereign bonds, although US Investment Bank raised all purpose loan from international bond market within three months, Muhith said.
In reply to a question, the finance minister said interest of bonds can be 7% to 9%.
Goldman Sachs said interest of foreign credit would be reduced if Bangladesh floated bonds in the international market.
“We are yet to decide about whether the government will go for credit from international bond market,” Muhith said, adding that his ministry would discuss the matter with the government agencies concerned. “Then we will inform Prime Minister Sheikh Hasina about it.”
The finance minister added: “The country’s demand for loan is zero because our foreign exchange reserve is now enough. Even the government does not need budget assistance from outside.”
“If we take credit from international bond market, it will definitely be used in building Padma bridge,” he pointed out.
According to the Bangladesh Bank data, the foreign exchange reserve has now crossed $21 billion.
The finance minister mentioned that the government allocated Tk800 crore this fiscal year for the construction of Padma bridge.
The raised fund from sovereign bonds might be used in the mega project “Dhaka elevated expressway” which is now stalled for fund crisis, he said. The much-talked-about Padma bridge construction needs a foreign funding of $1.8bn, according to the government information.
Source: Dhaka Tribune