Posted: Friday, June 14, 2019. 9:28 am CST.
By BBN Staff: The Belize City Council (CitCo) is aiming to address its short term cash flow problems through its new Municipal Paper initiative, which promises investors greater returns on investments than taking their money to commercial banks.
The MuniciPal Paper, an initiative similar to the municipal bond, is a low-risk investment that seeks to give the council some $6 million in financing with investors receiving interest upon their original investments at a fixed maturity date.
“The tranches will have maturities of 91, 182- and 364-days paying interest rates of 3.20%, 3.45%, and 3.70% respectively. Every security offered in the three tranches rate of return beats the long-running average inflation rate of 2.0% – a necessary condition to protect the real purchasing power of your portfolio,” CitCo explained.
CitCo explained today that it has been working with the relevant government ministries, including the Ministry of finance for the draft Municipal Paper, and even held a meeting with Prime Minister Dean Barrow on March 18, to get his approval on the initiative, it hopes to roll out by the end of July.
CitCo says it has gone the additional mile to prepare a draft legislation, the Municipal Paper Bill, which will ensure the protection of investors. The council explained that the initiative was
coined as a means of addressing the volatile nature of its annual cash flow, where the majority of its revenue is collected during the first quarter of the year. CitCo explained that for the remainder of the year the council has traditionally had to rely on high-cost traditional overdraft bank facilities and expensive property discounts.
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