THE HAGUE–Dutch State Secretary of Home Affairs and Kingdom Relations Raymond Knops last week asked St. Maarten Finance Minister Ardwell Irion to cease the procedure of floating a NAf. 75 million bond on the local capital market to raise funds to cover government’s operational costs.
Knops made his request in a letter that he sent to Irion last week. He asked the minister to halt the procedure and to officially have the loan request documentation placed on the agenda of the next Kingdom Council of Ministers meeting for “correct and legitimate” decision-taking.
The state secretary’s letter came after a warning by the Committee for Financial Supervision CFT on October 12 that the bond-issue was in violation of the Kingdom Law Financial Supervision RFT and that prior permission was needed.
The CFT reminded Irion that scheduled loans must be included in an approved, ascertained budget that complies with the norms of the RFT. “In this manner, the CFT is able to execute its supervisory task and to assess whether all applicable criteria of the RFT to issue a loan are complied with,” CFT Chairman Raymond Gradus stated.
Knops had a proposal for Irion in his letter. He offered the minister to grant a four-week postponement on the repayment of an earlier loan of NAf. 50 million. The NAf. 50 million bullet loan of the Netherlands to St. Maarten lapses on Wednesday, October 21, which is tomorrow.
By offering a deferral of payment for four weeks, Knops said that St. Maarten will avoid a technical default, with all sorts of consequences. “These four weeks offers you an opportunity to still comply with the conditions of the second tranche liquidity support,” he stated.
When St. Maarten complies, the country and the Netherlands can enter into consultations about the third tranche liquidity support, as well as a long-term solution for the NAf. 50 million expiring loan, stated Knops.
“However, my willingness will cease to exist if you proceed with a local loan for which no approval has been granted by the CFT,” the state secretary added, referring to the NAf. 75 million bond-issue for St. Maarten published by the Central Bank of Curaçao and St. Maarten (CBCS) on October 14.
Sources in The Hague say that the Dutch government hopes that St. Maarten will soon comply with the conditions of the second tranche so negotiations can start about the third tranche liquidity support, which is in the interest of the St. Maarten people.
In his letter to Irion, Knops noted that St. Maarten already knew 10 years that the NAf. 50 million loan needed to be paid back. “Even though I naturally have comprehension for the fact that the consequences of Hurricane Irma took up a lot of your attention and energy, this does not take away the repayment obligation, for which the CFT has asked your attention on multiple occasions.”
On September 17, St. Maarten submitted a loan request to the CFT for the refinancing of the NAf. 50 million loan. The CFT didn’t give permission for this and indicated that decision-taking on this request needed to take place in the Kingdom Council of Ministers.
Subsequently, St. Maarten asked to have this item placed on the agenda of the next Kingdom Council of Ministers meeting, which The Daily Herald understood will take place on Friday, October 30. This week, The Hague is on a short one-week autumn recess.
Source: The Daily Herald https://www.thedailyherald.sx/islands/knops-asked-irion-to-withdraw-bond-issue