EFPA

Based on Mr. Dookeran’s budget presentation CLICO’s liability to its EFPA and other short term investors is $12 billion. His plan to discharge this liability is in the form of an initial payout of $75,000 and a 20 year zero interest amortised payout of the balance in “sovereign guaranteed” government bonds each maturing yearly. An investor has the option to present each of the bonds upon maturity each year to the CBTT for encashment. Alternatively, the investor can sell the bonds in the secondary market place for a discounted price at any time.

Folks have started referring to the CLICO EFPA product as a Ponzi scheme.  While it may have been a Ponzi scheme at the time Mr Lawrence Duprey approached the Central Bank/Ministry of Finance for help in Jan 2009, my theory is that it didn't start out that way.  This theory is the subject of this article.