NCB Financial Group issuing new bond
NCB Financial Group Limited (NCBFG) is seeking to raise between $2.8 billion – $4.2 billion in its latest unsecured corporate bond issuance.
The proceeds from the bond will be used to refinance existing debt and for general corporate purposes according to the term sheet. The bond has a tenure of two years at a fixed interest rate of 10.75 per cent per annum with interest payments to be done semi-annually in June and December. The offer is open between June 19 to July 6 with persons able to apply for a minimum of $100,000 and apply for additional trading blocks in increments of $10,000 each. This bond would be listed on either the private or bond market of the Jamaica Stock Exchange (JSE).
NCBFG had issued an unsecured bond with two tranches at the end of March with Tranche A offering a 10.75 per cent rate and Tranche B offering a 11.75 per cent rate. These bonds were set to raise between $5.2 billion to $7.8 billion during the period and were aimed at supporting general corporate purposes of the financial group.
NCBFG’s 2022 audited financials revealed that as a standalone entity, it had $81.05 billion in borrowed funds which were repayable between 2021 to 2025. The interest rates on the variable rate notes ranged from 4.25 per cent to 9.75 per cent with the variable rate notes having rates based on the weighted average treasury bill yield plus a spread of 2.25 – 2.50 per cent per annum.
The interest rates that NCBFG is issuing its new bonds at reflects the higher interest rate being demanded in the current economic environment. The average yield on the 180-day treasury bill yield in June’s auction as 7.89 per cent while certificate of deposit auctions are being issued at 7.50 per cent. The Bank of Jamaica will decide on its monetary policy decision tomorrow as it has kept the policy rate at 7.00 per cent over the last several months.
