CARIBBEAN Producers Jamaica (CPJ) has hired BCW Capital to manage a major bond offering as the food service distributor seeks to raise up to $500 million primarily to help reduce existing debt.

The company is attempting to raise the funds through the issue and private placement of 9.5 per cent fixed and floating rate secured notes due May 2018.

“We are realigning our portfolio of loans to include some Jamaican debt,” CPJ executive chairman Mark Hart told the Business Observer yesterday.

“We borrowed in hard currency for several years and we saw where we had an opportunity, because of the narrowing of the spread (of loan rates) between the two currencies, to convert some of our loans into Jamaican dollar debt,” Hart said, noting that the funds would also cover ongoing working capital needs.

For investment house BCW Capital, the bond issuance follows last December’s completion of an unsecured, five-year, fixed-rate bond offer of $850 million for agribusiness giant, Jamaica Broilers Group.

“The market conditions for Jamaican dollar bonds, especially for corporate clients, is excellent. Our firm is comprised of experienced investment bankers, which enables us to quickly assess market conditions and execute these transactions,” said Charles Chambers, BCW Capital’s managing director of investment banking.

Chambers advised, however, that while conditions are ideal, the window of opportunity may not remain open over the long-term.

BCW Capital, since officially opening its doors last August, has introduced a number of structured products and raised over $2 billion in capital for its institutional clients. The investment house says it has grown its assets under management significantly while providing solutions to private clients who have seen returns in excess of 10 per cent on an annualised US dollar basis.

With a powerful sales and marketing team, led by Paul Simpson, BCW is expected to deliver for CPJ.

Hart said CPJ was drawn to BCW’s “unique perspective” on the advantages of financing via the local capital markets and noted that the company was impressed by the investment firm’s approach towards customer service.

“They reminded me of another company that started up and had tremendous success many years ago, Dehring Bunting and Golding,” Hart said.

“I just saw the same sort of energy and innovative thinking and they were very confident in what they could deliver,” he said.

CPJ is one of Jamaica’s leading food-service distributor and the fastest growing distributor in the retail sector. For the nine months ending March 31, 2013, the company posted revenues of US$50.1 million ($4.9 billion) compared to US$49.8 million last year. Net profits for the period fell from US$2.5 million last year to US$1.8 million, with the company stating that the bottom line was impacted by start-up costs associated with new projects, including CRU Bar, CPJ Market and the Deli in Kingston.

The company is currently engaged in an aggressive export thrust, with plans to ship its second container of processed meats into Caribbean markets, said Hart.

“As we speak, we are entering some contracts for other products from our processing plants in Antigua, St Lucia and possibly the Turks and Caicos Islands,” he said. “We think that there’s a great future beyond the shores.”

Meanwhile, BCW disclosed that it gained approval from the Bank of Jamaica for a cambio services licence. The cambio licence is operated by Island Connect, a subsidiary of BCW Capital. The company has announced Adrian Campbell as head of cambio operations.

“The cambio licence is a key component in augmenting our group’s services to the financial sector, allowing us to effectively deliver efficient foreign exchange transactions to our clients,” said Chambers.

“It serves to build out our product offering, in line with our mission to be the most customer-centric financial services company in the Caribbean.”