An Improving Trinidad & Tobago Energy Outlook

Higher Global Yields Meet an Improving Trinidad & Tobago Energy Outlook

September 25, 2026

Dave Dookie, CEO

• Higher U.S. Treasury yields pushed Caribbean bond yields higher. Trinidad & Tobago's USD sovereign bond yields continued to rise alongside global markets, reflecting higher U.S. interest rates rather than a deterioration in the country's underlying credit fundamentals.

• New gas developments provide a positive medium-term outlook. Recent NGC gas agreements and upstream developments are expected to increase natural gas production over the next several years, supporting LNG exports, foreign exchange earnings and longer-term U.S. dollar liquidity for Trinidad & Tobago.

• Global equity markets remained resilient despite bond market volatility. U.S. markets finished the week higher, led by technology stocks, while Europe posted modest gains. Japan outperformed in Asia, although Chinese markets remained mixed amid continued economic uncertainty.

• Domestic liquidity remains very supportive for new bond issuance. Commercial bank excess reserves increased to approximately TT$5.93 billion, providing ample liquidity that should support upcoming government and corporate bond issues despite higher global interest rates.

• Trinidad's equity market was quieter but well supported by trading activity. The Composite Index declined 0.92%, although trading value rose sharply to TT$50.5 million, driven primarily by significant activity in Massy Holdings, highlighting continued investor liquidity in the local market.

Trinidad and Tobago’s U.S. dollar sovereign bonds came under renewed yield pressure this week as the global fixed-income selloff pushed U.S. Treasury yields sharply higher. The T&T 2030 bond was offered to yield 6.08% and the 2036 around 6.56%. The move largely reflects the repricing of global risk-free rates rather than a material deterioration in Trinidad and Tobago’s underlying credit profile. U.S. Treasury yields ended the week at approximately 4.90% for the 10-year and 5.51% for the 30-year, materially raising the yield investors require from Caribbean sovereign credits.

Against this less favorable global interest-rate backdrop, the outlook for Trinidad and Tobago’s energy sector is becoming more constructive. NGC announced this week that it had Coconut commercial agreements with Shell for the Aphrodite project, where first gas is anticipated in the second quarter of 2027, and separately executed a binding term sheet to acquire 50% of the gas volumes from the Coconut development, which is expected to begin production in the first quarter of 2027.

NGC also recently acquired a 20% participating interest in the Manakin field. These developments should strengthen domestic gas availability and, if they translate into higher downstream production and LNG-related exports, could improve future foreign-exchange earnings and USD liquidity. The timing and scale of that impact, however, will depend on production increase, export volumes and energy prices.

United States – Equities Advance Despite Higher Bond Yields

U.S. equities remained resilient despite substantial volatility in fixed income. The S&P 500 gaining approximately 1.23% over five days, the Nasdaq Composite rising approximately 2.06%, and the Dow Jones advancing modestly. Technology remained supportive, with Apple and Nvidia higher over the period, while Meta posted a strong five-day gain despite weakness late in the week.

The bigger story remained bonds. The accompanying market report showed Treasury yields rising to multi-decade highs amid concerns over elevated oil prices, persistent inflation, heavy government borrowing and continued capital spending. The 10-year Treasury was quoted above 5% by some market platforms during the week, placing pressure on longer-duration assets and raising financing costs globally.

Energy markets also remained important. Brent crude was around US$104 per barrel, keeping inflation risks elevated even as oil eased from recent highs. Higher oil prices benefit energy exporting economies, but they also complicate the inflation and monetary policy outlook.

UK and Europe – Markets Show Resilience

The FTSE 100 gained approximately 0.34% over five days, while the FTSE 250 rose around 0.23%. European markets were also moderately positive, the Euro Stoxx 50 advanced approximately 1.07%, Germany’s DAX gained 0.41%, while France’s CAC 40 was broadly flat. European markets continue to balance relatively resilient corporate earnings against higher global yields and energy costs. Energy companies such as Shell performed comparatively well over the five-day period, reflecting continued support from elevated crude and gas prices.

Asia – Japan Leads, China Remains Mixed

Asian performance was uneven. Japan was the standout, with the Nikkei 225 gaining approximately 4.54% over five days and the broader JPX Nikkei 400 advancing more than 2%. Hong Kong’s Hang Seng declined approximately 0.97%, while Shanghai gained around 0.33%.

The divergence highlights continued investor preference for Japanese equities alongside more cautious sentiment toward China, where investors remain focused on domestic growth, property market conditions and policy support.

Pan-Caribbean – Higher Global Rates Feed Through to Bond Pricing

Caribbean USD bonds continue to offer significant yield premiums over U.S. Treasuries. Jamaica’s 2036 was offered around 5.85 and the 2045 around 6.58%. Barbados’ 2035 was offered around 7.04%, while Dominican Republic bonds ranged from roughly 6.2% to above 7% across intermediate and longer maturities. Within Trinidad corporate credits, NGC 2036 was offered around 7.05%, Trinidad Generation 2033 around 6.82%, and Heritage Petroleum 2029 around 6.02%.

Trinidad & Tobago – Strong Liquidity Supports Upcoming Issuance

Domestic financial system liquidity improved significantly this week. Commercial banks’ excess reserves rose by TT$1.81 billion, from TT$4.12 billion to approximately TT$5.93 billion. Only TT$130 million in OMO and debt-auction maturities occurred during the week.

This liquidity position is important given the pipeline of new local bond issues expected over the coming weeks. High excess reserves should provide a supportive technical backdrop for well-structured TTD issues, particularly from stronger government and investment-grade corporate credits. However, issuers cannot ignore the sharp rise in global USD yields.

The local equity market was more active, with TT$50.5 million traded, although the Composite Index fell 0.92%. Much of the volume was concentrated in Massy Holdings, which accounted for approximately 90% of shares traded.

As Trinidad and Tobago enters the final quarter with an unusual combination of higher global borrowing costs but improving domestic liquidity and a more encouraging medium-term gas outlook. For new bond issuers, that should mean reasonable access to local capital, but with investors increasingly focused on credit quality, maturity and pricing.

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