The Bank of Jamaica

(BOJ) has announced a plan to purchase GOJ fixed rate and variable rate

instruments and redeem BOJ instruments early, effective Thursday, March 19.

The offer will end

of Tuesday, June 30.

In 2019, the

Government of Jamaica bought back three of its US debt instruments, but that

was to save on interest rates. The current project seems intended to increase

liquidity in an economy affected by the spreading coronavirus disease.

The total budget

for the current operation was not shared, but the central bank said registered

holders of these instruments may make an offer to the BOJ to participate in the

operation.

The notice on the

BOJ’s website said the offer must indicate the name of the instrument, the

ISIN, the nominal amount for consideration, and the value and settlement dates.

These offers should

be submitted via electronic mail between the hours of 9:00am and 1:00pm each day

with the title “Bank of Jamaica Securities Operation” and sent to email address

BOJ.MarketOperations@boj.org.jm.

The central bank

outlined that the arrangement will be in place until 30 June 2020 subject to

review.

As to the pricing

methodology, the bank said BOJ instruments will be priced at par. USD Indexed

Notes will be converted to JMD using the BOJ 10-day moving average selling rate

applicable on the settlement date.

Meanwhile the price

on GOJ VR securities will be determined by using a yield to next repricing.

This yield is calculated using the applicable 6-month WATBY on the value date

to define an equivalent yield for the period to next repricing.

The price on GOJ FR

securities is determined using a yield to maturity. This yield will be

determined using the average bids of all indicative or actual secondary quotes

received on Bloomberg for the respective instruments on value date, the central

bank outlined.