9:40 PM Port of Spain – Trinidad launched bond offering of TT$794 million to fill the gap of its budget deficit that surged to more than 6% in 2009 and is likely to stay near 5% in 2010. The last and the fourth bond offering in the fiscal year will finance the general obligations of the budget.

The government of Trinidad and Tobago launched its TT$794 million bonds with 13-year maturity and pays fixed coupon rate of 5.95% a year.

The bonds are planned to be sold through a single price auction system beginning today that till April 16. The bond will pay interest every six months and finance general obligations of the government budget.

The bonds are designed to meet asset requirements of the Central Bank of Trinidad and Tobago after budget deficit surged to 6.3% of GDP in 2009 which is expected to shrink to 5% in 2010.

Trinidad inflation has perked up to 3.7% in the last twelve months to January after falling to as low as 2.2% in December.

Trinidad inflation surged to as high as 15.4% in October 2008 tracking the rise in oil prices and dropped to as low as 2.2% in December 2009.

Trinidad and Tobago’s debt to GDP ratio is near 44%, substantially lower than most nations in the Caribbean region but has suffered its balance of payment and exports in the last two years with the decline in oil prices.

Trinidad and Tobago registered current account deficit of US$712 million in 2009 and net official reserves declined to US$8.6 billion from US$9.4 billion covering only one year of import of goods and services.

Standard & Poor’s affirmed the Trinidad and Tobago’s long-term foreign currency sovereign credit rating of ‘A’, its long-term local currency rating of ‘A+’ and its short-term local and foreign currency ratings of ‘A-1’.

Moody’s Investors’ Service also maintained Trinidad and Tobago’s key foreign currency ratings of ‘Baa1’ matching the rating of Barbados, Costa Rica and Jamaica.