VICTORIA Mutual Wealth Management (VMWM), led by general manager Devon Barrett continues to carve a niche in the corporate bond financing marketplace in Jamaica.

The VMWM team, since March of this year, has successfully raised US$19.15 million ($1.63 billion) of a targeted US$20 million for AIC Barbados and a further J$800 million for AIC Jamaica.

The five-year, US-dollar denominated bond, which will be used to refinance existing AIC debt, pays interest at 9.5 per cent annually to bondholders and is secured by NCB shares to the tune of 1.5 times outstanding debt. Taxes are not withheld at source. Bondholders will also have security in the form of reserves of an additional amount of shares equalling 0.25 per cent of the outstanding principal amounts owing under the notes.

Caribbean Business Report understands that VMWM is still accepting investments for the remainder of the US$20 million and expects that the target will be achieved in very short order. Additionally, AICB continues through VMWM to raise funds in the local market and a second tranche is expected shortly. Barrett would not disclose full details of that offer but noted that the terms may not vary significantly from the current one.

However, the Jamaican-dollar denominated $800 million variable rate mortgage note has been fully subscribed. Bondholders will over the life of the investment, receive interest at 10 per cent annually for the first three months following which interest will be paid at a variable rate of three percentage points above the weighted average rate applicable to the six-month Jamaica Treasury Bill Tender. The bond is secured by legal mortgage of the NCB Towers.

AIC Barbados has come under pressure from investors in the past following the financial crisis which made it difficult to sell assets to repay note holders. However, according to AIC, the Group has consistently honoured all its obligations to debt holders.

According to the AIC investment note term sheet acquired by Caribbean Business Report, AIC Barbados originally issued notes with varying terms and amounts and in keeping with its mandate to provide returns to note holders, AICB successfully restructured its liabilities to note holders in December 2009 and has been consistently discharging its obligations to note holders under the terms of the restructured agreement.

In addition to the AIC bond, VMWM is also arranging an investment offer on behalf of IWC Capital Management. The investment management firm is marketing a private placement of its ‘IWC Opportunity Fund 1’ a closed end finite life private equity real estate fund for Jamaican and Caricom nationals and institutional investors. The Fund is a professionally managed medium to long-term investment vehicle for investors seeking portfolio diversification into the US real estate market at an attractive entry point in the market cycle.

Colando Hutchinson, manager, asset management at VMWM told Caribbean Business Report that the fund’s objective is to provide shareholders with a combination of investment income and capital appreciation through equity investments in private real estate transactions primarily located in New York City.

According to the IWC marketing document, the US property market is now characterised by overleveraged investors, unprecedented foreclosure rates, and expanding real estate-owned (REO) bank portfolios. Well capitalised purchasers now have an opportunity to acquire assets at discounts to historical capitalisation rates. The total targeted return over the life of the minimum seven year investment is around 18 per cent per annum.

Barrett noted the importance of the deals to the company’s strategy. “VMWM is positioning itself to play a larger role in the financial services sector as a part of its growth strategy. Our successful undertaking of the recent corporate investment initiatives and indeed further planned transactions indicate the confidence institutional clients and the investor community have placed in us. We intend to continue to provide smart investment choices for our clients.”