Entrepreneurship, stability and competitiveness: three attributes of the Cayman Islands economy that were recognised and reinforced in November 2009 when a high-level delegation from the government engaged a cross-section of investors from key financial markets around the world.
The programme was two-fold: first, generate investor interest in anticipation of a first-of-its-kind Cayman Islands government debt issue and second, raise investor awareness of incentives and programmes to encourage more financial services firms to locate operations in the in the Cayman Islands.
And the positive response from the markets was enough to deem both initiatives successful.
The debt issue – taking the form of an international notes offering – raised US$312 million principal amount of 5.95 per cent notes due in 2019 and made history as the lowest-ever yield by a Caribbean issuer in a US dollar public bond transaction.
The transaction was assigned an Aa3 (stable) rating by Moody’s – the same as the current Cayman Islands’ country rating – and created a new segment of high quality investors for the Cayman Islands government. The majority of notes were acquired by long-term institutional investors, further highlighting continued confidence in the credit profile and economic outlook of the Cayman Islands.
The order book for the transaction was equally strong, as the issue was four-times oversubscribed with US$1.2 billion in total demand from over 80 accounts, reflecting global interest among the US (41 per cent) Asia (29 per cent) and Europe (29 per cent), with the balance of demand from Latin America and the Middle East.
The transaction was coordinated by HSBC Bank (Cayman) Limited and HSBC Securities (USA) Inc. and included an investor road show comprising more than 40 meetings with top firms in London, San Francisco, Los Angeles, Boston, New York, Singapore and Hong Kong.
The Cayman Islands government delegation was led by Premier McKeeva Bush and included George McCarthy, chairman of the Cayman Islands Monetary Authority; Samuel Bulgin, attorney general; Kenneth Jefferson, financial secretary, and; Paul Byles, consultant to the Ministry of Finance.
The debt issue investor road show provided an ideal opportunity to simultaneously target the broader financial services community to market the Cayman Islands as a financial centre of excellence.
In partnership with HSBC, briefings were organised in London, New York, Hong Kong and Singapore collectively attracting more than 350 representatives from leading banks, law and accounting firms, hedge funds and other institutional investors. These events allowed the Cayman Islands to showcase the jurisdiction and its economic strengths and present newly-launched incentives and programmes to attract more physical financial services investment to the country, specifics of which include:
- Securing resources within the Cayman Islands Investment Bureau to support, advise and act on behalf of potential firms considering Cayman in such as areas as finding office accommodation, identifying staff or supporting relocation of families;
- Working with the Cayman Islands Monetary Authority to consider expedited turnaround for time-sensitive applications;
- Providing dedicated people within the Immigration Department to expedite work permit applications
Issuing directives to the Immigration Department to structure three to five-year work permits for professional staff of accredited investors in the financial services industries;
- Offering exemptions from standard term limits for work permits of senior leaders of financial services firms such as CEOs, managing directors or other senior staff under the existing ‘key employee designation’ programme;
- Amending immigration legislation to offer a 25-year direct investment certificate for investors with a net-worth of CI$5 million dollars and who have invested at least CI$2 million dollars in the Cayman Islands or in a local business. The certificate will entitle the holder to work within the business in which he/she has invested in and will entitle a spouse and minor children to reside in the Cayman Islands as residents. This certificate will be renewable or extendable at the end of 25 years, and;
- Guaranteeing not to increase work permit fees for a period of four years for permits granted under the programme.
Camana Bay, a major lifestyle and commercial development in Grand Cayman, committed its support to the programme from the outset, providing marketing support and representatives in London and New York to highlight special incentives and a dedicated lifestyle concierge for a select group of potential investors considering relocating to the Cayman Islands.
Cayman Islands private-sector firms with operations and business interests in all four markets where the events were held provided a reinforcing presence, as did attendees from other Cayman-based organisations such as the Cayman Islands Shipping Registry, which has representatives in London, Singapore and Hong Kong.
The Cayman Islands Government is identifying additional international marketing opportunities building on the momentum created and is seeking private sector partnership in areas of mutual benefit to extend the jurisdiction’s reach in existing and potential global markets.