Banker and Advisor to Government

What is the difference between a Treasury bill and a Government Bond?

As a means of financing expenditure, the Bahamas Government is able to borrow from the private sector through the issuance of its own financial securities. It uses primarily two types of securities: the Treasury bills (T-bills) and Bahamas Government Registered Stock (BGRS).

The T-bill, which carries maturities of less than one year from the date of issue, provides short-term financing to the Government. They are issued to the investor at a discount, which means that the price paid for them is below the actual face value. Upon maturity, the investor receives an amount equal to the face value of the T-bill, thus earning income equivalent to the difference between the price paid for the security at issue and the amount received at maturity.

BGRS, which carry maturities in some instances of up to 30 years, provide long-term financing to the Government. With a minimum investment of $100, they are issued at par, in multiples of 100, and carry interest rates which, if not fixed, are usually tied to the Bahamian Prime Rate. The investor then receives interest income, which is normally paid semiannually, and the principal investment at maturity.

  1. What is the difference between a Treasury bill and a Government Bond?
  2. How are Treasury bill rates determined?
  3. How does the Treasury bill tender operate?
  4. How do I buy Bahamas Government Registered Stock?
  5. What if I needed to sell my Bahamas Government Registered Stock?
  6. What should I do if I've lost my Bahamas Government Registered Stock certificate?
  7. Can I use my Bahamas Government Registered Stock as collateral if I needed to get a loan?
  8. What is the National Debt?
  9. How has the National Debt changed over the past few years?

Available FAQs