ISP Finance Services Ltd (ISP), a relatively new entrant to the local stock market, is seeking to raise $150 million by corporate bond, offering investors a return of ten per cent interest per annum over its three-year lifetime.

The offer, brokered by Victoria Mutual Wealth Management Ltd, opens on September 1 and closes on September 22.

The bonds will mature on September 20, 2019. Interest will be calculated daily and will be paid quarterly. The first payment day is December 20, 2016.

The prospectus notes that ISP’s obligation to pay will be secured by a debenture; creating a fixed and floating charge over all of the assets of the company.

The lender offers commercial loans to micro and small businesses, and personal loans to employed persons. In the first quarter of 2016 the company conducted an IPO which garnered $98 million.

The company says it intends to use the proceeds of the new bond issue to expand its loan portfolio and for working capital and general corporate purposes.

Directors note that ISP’s loan portfolio has grown from approximately $2.5 million to some $303.9 million in 2015.

Minimum subscription for the new corporate bond issue is $20,000, and further increments of $10,000.

The bond also contains three financial covenants for the benefit of bondholders, which include a minimum interest coverage ratio of at least 1.5 times EBITDA.

The others are a maximum leverage ratio of no more than 2.0 times total equity, and a minimum collateral coverage ratio of no less than 1.5 times the aggregate principal amount owing on bonds.

The company says it may at any time voluntarily prepay the bonds, or redeem, at par, all or some of the bonds in issue.

Interest payments to Jamaican resident bondholders will be subject to tax at 25 per cent, withheld at source and paid to the tax authority.

For the six months ended June 2016, the company made net profit of $8.6 million on revenue of $106 million.