S.S.B Says Risk Is Low and Margin of Interest is High for Distillery Loan

Deborah Ruiz

The loan will be for a period of twelve years initially, at an interest rate of seven point three five percent on the total. Through this loan arrangement, the Social Security Board will earn over five million dollars during the twelve-year-period. But S.S.B. officials assured that while there is always a degree of risk with every loan, the collateral provided, which includes over seven hundred acres of land, and personal money from the Cuellos, cover the loan.

Deborah Ruiz, C.E.O., S.S.B.

“In terms of the debate of whether or not, um,  alcohol is a social vice that whether the social security, I think that is something that we would have to explore farther. If there is any impact on the phone in any way in terms of our focus. But at this time, the committees, and everybody looking at it so far have not identify that as a high risk profile for this for the phone, um, simply because we are generating, um, um, uh, employment and we would be generating income into the phone and growing a local business that hopefully will take 14, um, based on the numbers that we have seen in the initial reports that have been done. The production that the company is purporting to do is a drop in the bucket of what is out there, simply looking at Mexico, which is nearby and other areas that he would hope to venture into.  Although the numbers are huge for us, it’s small compared  to our population outside. So I don’t think it will have that much of a big footprint, to say that we have compromised significantly.”

Leo Vasquez

Leo Vasquez, General Manager, Finance & Investment Services, S.S.B

“The production of the actual rum is really a drop in the bucket to what’s out there in the Mexico market. You’re talking $500 billion, so $9 million is neither here nor there for that. But  you know, it’s again, strictly by the numbers, given the cost, the margin, the sale, and where you can put it in those duty free shops to start with is you’re talking like about what, 3, 000 cases per month, which is really nothing even compared to what the Travelers, the Cuello’s Distillery, the Old Masters do locally. So we wouldn’t say it’s speculative because even should this fail, we’ve got the collateral coverage, so there’ll be no loss to the fund. But again, strictly by the numbers, we look at everything. His – remember 30 years this man is experienced in the market. He knows how to do rum, to make rum. We’ve looked at where it’s going to export, what is going to do in the Cancun’s, the Tulum’s, all the spots where the free and all these markets are,  it just seemed, it just made sense. Remember, he also has the EPZ zone, so they have a lot of things going for the project. And that is why we strongly believe that the $9 million over the two years – and then in year three, actually year two, he starts to produce and export.  It’s really, a no brainer for us.”