National Commercial Bank (NCB) and Capital & Credit Financial Group (CCFG) have formally accepted the government’s Debt Exchange offer.

On Thursday, three days after the official launch of the programmme, NCB said in a press release that it made the decision after special sittings of the respective boards of its major subsidiaries, NCB Capital Markets and NCB Insurance.

“As we have said publicly before, we believe the main objective of the debt exchange programme — to reduce the interest cost burden on our Government, and ultimately our country — can only be achieved with the support of the financial sector. NCB therefore has been cooperating closely with the Government in the implementation of this programme.” stated NCB Group managing director Patrick Hylton in a press release.

The Jamaica Debt Exchange (JDX) programme is expected to save the country $40 billion in interest expenditure on domestic debt over the next financial year. Under the programme, the holders of some $700 billion worth of domestic government bonds which carry varying interest rates, ranging up to 28 per cent, will exchange them for new bonds that will carry much lower interest rates and extended maturities.

“We believe a lower interest rate environment will provide revenue opportunities such as more affordable access to credit by our customers,” said Hylton, adding “that, coupled with our ongoing focus on improving efficiency in all areas of our business, will see us continuing to ensure our customers are well served and that the group maintains strong and profitable operations”.

The acceptance will result in NCB and its subsidiaries exchanging 100 per cent of its J$ and locally issued US$ government securities maturing after February 16, 2010. Those securities represent 16 per cent of the Bank’s Total Assets and will now provide lower income yields, the firm said in the release.

Meanwhile, CCFG chairman Ryland Campbell also declared his company’s support for the JDX on Thursday, saying, “These are extraordinary times facing the country which, call for extraordinary measures, which though they may require some sacrifice and cause some discomfort, must benefit from total participation from all stakeholders.”

Campbell noted further that “a debt-exchange programme, such as Jamaica has undertaken, is not a new concept”, noting a similar initiative of the Government of the Republic of Seychelles, which announced on January 16, that that country’s debt exchange offer, launched on December 7 last year received the overwhelming support of approximately 89 per cent participation by its creditors upon the expiry date on January 14 this year.

Campbell pointed out that “such action calls for collective responsibility, despite any possible pain in the short term, for the national good, as has been exemplified by the people of the Seychelles”.

The CCFG boss said, “Jamaica has no choice, and as such Capital & Credit is committed to playing its part in rolling out the programme.”