Resolve raises questions The matter will no doubt be deeply scrutinized in the coming days and weeks, but some of the questions initially being asked in the community include the following: What financial instrument did Resolve issue to BOB in exchange for the nonperforming loans? What assets will the new company receive? How was it determined which nonperforming loans went into the new company? In a windup or liquidation how would the debt issued by Resolve rank, versus the BOB preference shares? Of the loans transferred, how many are supported by hard assets versus personal guarantees by the company owners? What is the total equity capitalization of BOB? Which accounting firm was engaged to manage the debt collection? Who are the auditors and lawyers for Resolve? How many employees will Resolve engage? The involvement of the Central Bank (CBB) was touted by Prime Minister Perry Christie as proof that the CBB approved the deal and signed off on it. And in fact, CBB Governor Wendy Craigg said the new arrangement was good for financial stability. However, why would the Central Bank accept the “letter of comfort” as a good bond if it is not a government guarantee? It is also not clear what happens if nothing is collected or only a portion is collected over the 10-year life of Resolve. It has been said that Resolve will have more power to collect on the bad loans of the BOB. Said one financial professional: “How can this be? Are they going to Parliament to get special rights for Resolve?” thenassauguardian/bahamas-business/40-bahamas-business/51445-resolve-raises-questions
Posted on: Tue, 04 Nov 2014 01:23:04 +0000
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