NCB Capital Markets has closed a bond offer for its parent company, the NCB Financial Group, raising $10.21 billion.
The money is being used to refinance existing debt.
Chevon Campbell tells us more.
The offer drew subscriptions of about $11.06 billion. This is against an initial target of $6.8 billion — an over-subscription of roughly 62 per cent.
The NCB Financial Group then exercised an option to increase the size of the issue, and $10.21 billion was allocated.
The bond has three Jamaican-dollar tranches.
The 18-month tranche carries a coupon of 7.25 per cent and matures in January 2028. The three-year tranche pays 8.5 per cent, maturing in July 2029. The five-year tranche pays 9.5 per cent, maturing in July 2031.
Interest is paid twice yearly, with the principal repaid in full at maturity.
For context the Bank of Jamaica’s policy rate stands at 5.5 per cent, and headline inflation was 7.5 per cent in July, above the central bank’s target range.
The offer opened on June 29 and closed on July 30. The bonds were issued on July 31.
It was done as a private placement, under the Financial Services Commission’s exempt distribution framework for highly rated debt securities.
CEO of NCB Capital Markets, Angus Young, says the response shows the depth of capital available in Jamaica and investor appetite for well-structured opportunities.
