The CCM-led Nevis Island Administration has paid bondholders of defaulted government Treasury Bills without the holders having to take a haircut, Premier Hon. Vance Amory confirmed. The Premier informed that bondholders had been paid since September and due to creative financial strategizing on the part of his administration, they had not incurred any losses. Holders of federal government bonds which were defaulted on in November 2011 had to take a 50% ‘haircut’ on their returns. “What we did was those who wanted to cash in their bonds we paid them out, which was a small amount; but we also made provisions for a loan from one of the local banks to pay the interest on the outstanding bonds. “So we paid the interest to those who wanted to roll over and we paid out those who wanted to cash in their bonds,”he said. On June 24 the Eastern Caribbean Securities Exchange (ECSE) informed holders of NIA 365-day Treasury Bills which matured June 22 of non-payment of interest “due to non-receipt of the necessary funds”. The Concerned Citizen’s Movement had been in government just about 5 months at that point, having defeated the Nevis Reformation Party (NRP) in local elections near the end of January. The Dr. Denzil Douglas-led administration, which had for the first time in the NIA bond issuance history refused to guarantee the loan the NIA required to pay the bondholders, told the Nevis government to find its own means of coming up with the money. This left the NIA in a financial dilemma as it could only raise a small percentage of the money without the ability to secure a loan, which would have required a guarantee by the federal government. “It did not leave us in a happy position. We had to make our own arrangements; paddle our own canoe. It was my estimation, and that of a number of persons who may not say anything, that it was regrettable [federal government’s action]. That the federal government, having guaranteed initial issue, even recognizing that there were financial difficulties for our administration, it must have meant that that they were prepared to assist with the repayment for the cashing of the bonds if there were any difficulties, whether by making money available directly from the federal resources or by assisting the NIA to raise money,’said Hon. Amory. The Premier, who also holds the Finance portfolio, explained to The Observer how his administration was able to meet its obligations to bondholders to the tune of $20 million. “We had to come up with a new strategy to deal with the holders of the original bonds. A number of the bondholders had substantial holdings and they agreed to take what is called over-the-counter one-year treasury bills, so we’ve issued those from inside the Nevis Island government itself,”he explained. Premier Amory said it was very “kind”of the bondholders, who were mainly local individuals and institutions. “In contacting them they recognized the situation and they were magnanimous enough to take over-the-counter- treasury bills in exchange for the bonds.”The NIA is now the sole responsible agent for the newly issued bonds and now has to make provisions pay those or have them rolled over at the end of the year. “Maybe we’ll do the same, raise money or use money from government and the Consolidated Fund to pay the interest and then persuade the bondholders to roll over,”he said.