James Smith

James Smith, chairman of the Board of Directors of government's wholly-owned the special purpose vehicle (SPV) Bahamas Resolve Ltd. (Resolve), has confirmed that the 13 loans transferred from Bank of The Bahamas (BOB) to create the SPV -- supposedly worth $100 million -- were only worth about $22.5 million.

Smith told the Nassau Guardian yesterday that the actual value of the loans was "a hell of a lot less" than $100 million.

When the government created Resolve in October 2015, $55 million of the $100 million 'transfer' to the SPV went to the Bank of The Bahamas' books to assist the bank with its statutory capital requirements. Resolve then went through the loans, which were supposed to amount to $45 million or so.

"(When we) looked at the collateral itself, you're looking at maybe half that amount or less," Smith said.

Smith said the board had been working, but reiterated that the loans were substantially under the "book value."

"We completed a report that we're about to submit, and essentially what we're looking at now is that they transferred over 13 loans to us and when we've gone through and had them evaluated, we found that the value of the underlaying assets -- the collateral -- was substantially less than expected. It was a hell of a lot less," he said.

Loans
Deloitte and Touche manages the Resolve portfolio.

The bad mortgages belong to Kendal Robert Williams (and Kendal Williams Construction Company), Kingsley Enoch Edgecombe, Landstar Concrete Products, John H. and Idena C. Bain (and Bain Investments and Development), Ruiz Munnings (and Malv Investments, and Sea-Ban Products), Franklyn J. Morley (and Longside Investments), Jerome Rofeno Forbes, North Andros Food Services, Dr. Donald Leon Cooper and DLC Investments, Philip Lightbourne, H&B Investments, Premium Food Services, Campbell's Electric Company (and Stanley Campbell), Lock Resorts, Anthony Erasto Albury, and Philip Lundy and East Street Investment Company.

Work
Meanwhile, Smith explained that Resolve had "a sort of work-out" on two of the properties -- the properties had not been sold, but Resolve is working with the loan-holders to get a footing for them to be in a position to make some payments. He declined to identify which of the properties had been treated thusly. However, given that Phil's Food Service -- reportedly owned by Philip Lightbourne -- remains in business, it is reasonable to suppose that this is one of the two.

Smith also disclosed that three of the other properties had been sold, or are in the process of being sold. And while again he declined to give specifics, he said they were 'high-end.' Guardian Business has reported on the SPV's attempts to unload some of the high-end properties in its portfolio.

In addition to a completed set of six residential townhouses in the vicinity of Caves Village off West Bay Street, Resolve has put Casa Lamarinque in Lyford Cay, Casa Plantation in Ocean Club Estates on Paradise Island, and a partially completed five-unit set of residential townhouses near Love Beach in Western New Providence up for sale this year.
Guardian Business understands that some of the owners of the loans are not cooperating. Smith would not comment.

Resolution
Smith reiterated that there has been movement of some sort on five of the 13 loans.

"So maybe moving towards some angle or resolution to about 35 percent of them," he said.

Smith stressed the tightness of the mortgage market: every bank and insurance company is trying to collect, or to sell. "It's tough out there. There's just over $1 billion in non-performing loans, $650 million of which are mortgages. But we're working on it," he said.

K. Quincy Parker, Guardian Business Editor

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