NPF board pays off $60M gov’t bond - Solomon Star News

NPF board pays off $60M gov’t bond
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24 June 2020
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$60M BOND DEAL... Solomon Islands National Provident Fund Board (SINPFB) on Friday purchased the remaining $60 million of the government’s $120 million Covid-19 development bond. The signing was done by the Minister of Finance Harry Kuma and Acting NPF chairman Dr Aaron Oritaimae. The ceremony was witnessed by the Governor of the Central Bank of Solomon Islands Dr Luke Forau, the Permanent Secretary of Finance Mckinnie Dentana, NPF Board directors Shephard Lapo and Robert Au, NPF General Manager Mike Wate and NPF senior officials.



SOLOMON Islands National Provident Fund Board (SINPFB) says it has purchased the remaining $60 million of the government’s $120 million COVID-19 development bond on Friday 19 June 2020. 

The other $60 million were earlier purchased by Solomon Islands Electricity Authority (SIEA) and Solomon Islands Ports Authority (SIPA).  

In accepting the payment, the Minister of Finance Harry Kuma thanked the NPF board for responding positively to support the government’s economic stimulus package designed to minimise the impact of the pandemic on our economy.  

Kuma also thanked the board for the implementation of the covid19 exemption orders for early withdrawal by members. 

“In a small but positive way these amounts disbursed to members under the orders can also be seen as an economic stimulus to our economy,” Kuma said.

Acting chairman Dr. Aaron Oritaimae thanked the government for giving the opportunity for NPF to purchase the bond amidst the uncertainty of our economy and falling markets when credible investment opportunities are hard to come by.  

“In addition to the returns for our member wealth creation, the Fund is also pleased to provide the support to the Government to implement its development plans as agreed under the terms of the Bond Agreement,” Oritaimae said.

“To date, the government is a strong and credible borrower with the Fund meeting on time the payment of its interest and principal loan obligations for its earlier issued 2017 $150 million development bonds,” he added.  

Oritaimae said with this new purchase the Fund’s exposure to the government is now at $210 million, representing about 7% of the Fund's total gross investment portfolio.  The SINPFB target exposure to the government is 15%.   

The bond purchase is funded by the recall of a much lower earning asset, for the 10-year bond that has a coupon interest rate of 5% earning the Fund $3 million in interest income per annum.  

Oritaimai assured NPF members that despite the expected COVID-19 negative impacts on the fund’s financial performance for the 2020 financial year, the board is looking beyond this crisis to take advantage of opportunities in anticipating the rebounding of our economy and the global economy.

Last Friday’s signing ceremony was witnessed by the Governor of the Central Bank of Solomon Islands Dr Luke Forau, the Permanent Secretary of Finance Mckinnie Dentana, NPF Board directors Shephard Lapo and Robert Au, NPF General Manager Mike Wate and NPF senior officials.

 

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