Finance Minister Dr Peter Phillips was at pains yesterday to point out that J$2.3 billion, designated as 'loan-raising expenses' under external debt in the 2013-2014 Budget, was not an indication of a National Debt Exchange (NDX) on the external side.
The Government has set aside another J$3 billion for loan-raising expenses which relate directly to the NDX.
Under the NDX, a 12.5 per cent fixed-rate Jamaica dollar bond will be exchanged for a new fixed-rate bond paying interest of 7.25 per cent and maturing in 2016.
Opposition Finance Spokesman Audley Shaw wanted to know what accounted for the J$2.3-billion provision on the external side.
Shaw queried: "Are we going to have an NDX on the external debt?" In a quick response, Phillips declared: "Definitely no."
The minister cautioned: "I would not want any misinterpretation, any effort to disrupt markets and create fears in the marketplace; I would not want anything like that to ensue from this House."
In the Estimates of Expenditure, the J$2.3 billion is said to provide a contingency for "the invocation of incidental expenses incurred in loan raising, such as legal fees, commission arrangements fees and advertising cost."
Shaw further queried: "The possible market-friendly liability manage-ment programme on the external side, would that include the Air Jamaica, CAP (Clarendon Alumina Partners) and NROCC (National Road Operating and Constructing Company) bonds?"
Said Phillips: "It's not impossible, it could."
Outstanding Air Jamaica bonds include US$200 million at 9.375 per cent due next year, and US$125 million at 8.125 per cent which becomes due in 2027.
In November 2011, NROCC raised some US$294.2 million from a 9.37 per cent bond to repay debt. The bond matures in 2024.