Scotia Investments Jamaica Limited (SIJL) recently acted as lead arranger and co-broker with GK Capital Management to successfully raise $3 billion by way of a private bond placement for GraceKennedy Limited.

The proceeds of the issue will support GraceKennedy’s larger strategy of mergers and acquisitions (M&A).

The bonds were issued under the Financial Services Commission exempt distribution guidelines as “highly rated debt securities” on the basis that the bonds received an investment grade rating of jmAA from the Caribbean Information and Credit Rating Services Limited (CariCRIS). The rating agency cited its expectation for continued strong demand for the group’s food products and services, and improved operating efficiencies, notwithstanding the challenging operating environment associated with the novel coronavirus pandemic.

Commenting on the issue, Stanley Thompson, director, Capital Markets at SIJL, said, “We were deliberate in creating a financing solution that met GraceKennedy’s desire to raise affordable funding with flexible terms. We are also pleased that we were able to provide investors with an investment grade asset issued by a blue-chip company to add to their portfolios which is expected to provide stable returns at relatively low risk.”

GraceKennedy (GK) Group CEO Don Wehby said that the vision of his organisation is to go global.

“M&A is a key strategic driver of growth for GraceKennedy, as we work towards our vision of becoming a global consumer group and continue seeking opportunities to deliver long term value for our shareholders and customers.

“We see the issuing of this bond as a great opportunity to advance our M&A push, which has been accelerated through GK’s recently established M&A unit. As we continue to roll out our M&A strategy, GK has a number of transactions in the pipeline. These are typically funded by a mix of debt and equity, for efficiency of our profit and loss and balance sheet.

“GraceKennedy has always maintained high cash balances in keeping with regulatory requirements and to ensure comfortable reserves, which is particularly important in the current economic climate associated with the COVID-19 pandemic,” Wehby said.