JMMB raises US$20 million in private placement

Friday, August 01, 2014

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FINANCIAL outfit Jamaica Money Market Brokers (JMMB) has raised US$20 million ($2.2 b) in a private placement to Jamaican investors.

It's the first such disclosure from the group this year and comes as investors are clamouring for hard currency investments amid a depreciating dollar.

"JMMB has advised that it has raised US$20 million through the issue and private placement of unsecured extendible notes denominated in United States dollars," stated a JMMB release posted to the Jamaica Stock Exchange. "The offer was only available to Jamaican residents."

The private placement offer closed on July 18 and will mature on July 18, 2016.

"Noteholders have an option to either redeem their notes on the maturity date or extend the maturity of their notes to July 18, 2019," stated JMMB.

The interest rate on the original note is 6.75 per cent fixed for two years and 7.75 per cent on the extended notes. JMMB, with one of the largest customer bases in the island, holds equity of $18.6 billion from $17.2 billion a year earlier, annual financials indicate.

The local currency lost some 13 per cent of its value in 12 months and more than one-quarter its value in two years since the start of negotiations between the Government and the International Monetary Fund to enter an agreement.

Consequently, a number of investment firms are shifting to US instruments to satisfy demand from clients. The JMMB private placement would ostensibly fall into meeting its client needs. However, JMMB did not immediately return queries for comment up to press time.

JMMB indicated in its annual report that market conditions led it to diversify its portfolio of overseas assets to clients.

"This was achieved as we added over 20 new sovereign, quasi-sovereign and corporate bonds covering the Caribbean and Latin America as a part of our offerings," stated JMMB in its audited annual financials released this week.

"As clients benefited from the outright ownership of assets we were able to increase trading gains from client brokering activity. Growth in US$ bond volumes for our retail clients increased year over year by 9.61 per cent or US$6.65 million," the company said.




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