MAYBERRY Investments Limited (MIL) will once again tap into the Jamaica Stock Exchange’s (JSE) bond market to refinance a $1.374-billion tranche of its last bond offer, with the option to upsize the offer to $2.061 billion.

Mayberry Investments raised $6.39 billion across four tranches in January 2023 in its public bond offer, the first public bond offer in more than six years on the JSE Bond Market. Since then, Mayberry Investments arranged a US$12-million public bond offering for Express Catering Limited (ECL) and a $3.38-billion bond offering for Mayberry Jamaican Equities Limited (MJE) in the first half of 2024.

The company’s latest bond offer is meant to refinance bonds which matured on July 19 and are no longer listed on the JSE Bond Market. Those bonds had a 10 per cent interest rate and a tenure of 18 months. The new bond will retain the same tenure but will have an interest rate of 10.75 per cent. The proceeds of the new bond will also be used to pay approximately $45.43 million in expenses associated with the bond, of which $26.94 million is allocated to marketing expenses.

The bond will be secured by a charge over its secured loan book, valued at $7.13 billion, relative to underlying security of that loan book which has a market value of $18.25 billion. There is already a security interest of $6.22 billion on the loan book.

The offer opens on Friday and is set to close by September 20, subject to the offer being closed early or extended beyond the original closing date. Mayberry Investments’s individual clients can apply on ipo.mayberryinv.com/mi-ipo while other investors can use selling agents Sagicor Investments Jamaica Limited or JMMB Securities Limited. The minimum subscription amount is $20,000 with increments in multiples of $10,000.

Mayberry Investments deployed the proceeds from its 2023 bond offer by expanding its lending book, which saw its client margin book rise 27 per cent from $3.82 billion to $4.84 billion. It also lent $4.96 billion (US$31.79 million) to MJE which expanded its investment portfolio in stocks like Jamaica Broilers Group Limited, Dolla Financial Services Limited, and NCB Financial Group Limited. MJE repaid $4.73 billion (US$30.50 million) to Mayberry Investments in the first half of 2024, which reduced its margin loan balance to $1.33 billion (US$8.55 million).

This expanded loan book from increased margin loans and bonds resulted in Mayberry Investments’s net interest income rising by 261 per cent to $439.16 million. Overall net interest income and other operating income grew 40 per cent to $768.89 million. However, a seven per cent rise in operating expenses to $1.04 billion resulted in a net loss of $268.37 million.

Mayberry Group Limited (MGL), the ultimate parent company of the Mayberry-affiliated companies, reported a near doubling of its net interest expense to $153.88 million as the interest income derived from MJE was eliminated on consolidation. The higher operating expenses and share of loss from its joint venture resulted in MGL recording a net loss attributable to shareholders of $705.81 million relative to the net profit attributable to shareholders of $293.34 million for the six-month period.

MGL’s total assets for the six months are eight per cent higher at $63.51 billion, with investment securities and investments in associated companies totalling $30.39 billion while loans and other receivables totalled $14.63 billion. Cash resources ended the period at $4.18 billion, with net cash and cash equivalents of $2.78 billion. Total liabilities increased 15 per cent to $38.98 billion following MJE’s recent bond raise, with equity attributable to shareholders decreasing two per cent to $15.91 billion.

MGL declared a dividend of $0.125, totalling $150.14 million, to be paid on August 30 to shareholders on record as of August 16. Mayberry Group also approved a dividend policy with an intent to pay a quarterly dividend. MJE has not declared a dividend so far in 2024 with the company paying dividends going back to 2019 — a few months after it listed on the JSE.

As of Monday, tranche III and IV of MIL’s 2023 bond offer and the three tranches of MJE’s recent bond offer are the only Jamaican-dollar (JMD) bonds on the JSE Bond Market. ECL’s United States-dollar (USD) bond is the only bond on the JSE USD Bond Market.

While the JSE Bond Market is another platform to give publicly listed company’s or their subsidiaries the opportunity to tap into a wider pool of investors and provide access to a fixed income instrument, trading on both markets is infrequent. Bonds aren’t frequently traded in most instances by investors with ECL’s bond recording its first trade on August 16, four months after it was initially listed. MJE’s tranche I and I recorded their first trades in the week of Augst 9 while tranche II recorded its first trade on August 19. This bond was listed on the JSE Bond Market on July 30 with the listing ceremony set for this week.