MAYBERRY Investments Limited (MIL) will tap the Jamaica Stock Exchange’s (JSE) Bond Market once again to raise between $2.30 – $3.45 billion as it seeks to refinance a recently matured bond.

Mayberry’s bond prospectus was published on Friday, with the company planning to issue a $2.3-billion secured bond which will have an interest rate of 10.25 per cent and a tenure of 24 months or two years. This bond can be upsized to $3.45 billion if demand exceeds the initial target amount, with $45.43 million allocated to expenses associated with the bond, $26.94 million being related to marketing expenses.

This new bond issuance, dubbed tranche III, is meant to refinance another tranche with the same name that matured on January 20. That tranche had a face value of $2.282 billion, an interest rate of 11 per cent, and a tenure of two years. That tranche was issued in January 2023 when Mayberry Investments issued a $6.39-billion secured bond (BondBerry) with four tranches that had interest rates ranging from 9.25 – 12 per cent, and tenures ranging from 13 to 36 months.

Tranche I matured in February 2024 with a face value of $755.22 million and an interest rate of 9.25 per cent while tranche II matured in July 2024 with a face value of $1.374 billion and an interest rate of 10 per cent. Mayberry Investments issued a new public bond in September 2024 to refinance tranche II, through which it was able to raise $2.061 billion. That new bond had an interest rate of 10.75 per cent and is set to mature in March 2026. Tranche IV of the January 2023 bond has an interest rate of 12 per cent and is set to mature on January 20, 2026, with a face value of $1.981 billion.

“Another valuable benefit of fixed income investments issued by blue chip corporates is that they tend to have lower price movement than shares. A softer-than-expected quarterly financial update will typically cause more significant downward pressure on the share price than on the fixed income instruments issued by the very same corporate,” said newly installed Mayberry Investments CEO Patrick Bataille in the letter to prospective investors.

This new bond will be secured by a charge over Mayberry Investments’s secured loan book, which had an aggregated value of $9.03 billion as of September 30, relative to underlying security of that loan book which has a market value of $22.29 billion. There is already a security interest of $6.53 billion on the loan book. Mayberry Investments will be limited to financial covenants that stipulate it not surpassing a maximum leverage ratio of 4.0 times and a minimum current ratio of 1.20 times.

Although Mayberry Investments’s ordinary shares are no longer listed on the Main Market of the JSE, it is still a reporting issuer and publishes quarterly reports to the public. The company’s standalone numbers revealed that its net interest income improved four per cent during the third quarter (July to September) to $133.46 million. Due to an increase in several public and private capital market raises for its clients, Mayberry’s total net operating revenue improved 73 per cent to $572.82 million. Despite a 34 per cent increase in total operating expenses to $536.12 million, the company reported a net profit of $36.71 million compared to a net loss of $83.18 million.

For the first nine months of 2024, Mayberry Investments effectively doubled its net interest income, which improved from $250.46 million to $572.61 million. Due to the improvement in consulting fees and commissions from several capital markets deals, net operating revenue grew 52 per cent to $1.34 billion.

However, the company’s operating expenses increased 14 per cent to $1.57 billion, which saw the company recording a net loss of $231.66 million –– which was slightly lower than the $510.02 million in the comparative period.

Mayberry Investments’s asset base declined six per cent during the nine-month period to $37.85 billion, with loans and other receivables being the largest asset at $10.60 billion. Overall net cash ended the period at $2.72 billion, with the company benefiting from the repayment of funds owed by related companies, largely from its affiliate company Mayberry Jamaican Equities Limited (MJE) which repaid $4.73 billion to related parties during the period. Total liabilities and total equity closed the period at $31.43 billion and $6.42 billion, respectively.

Mayberry Investments is a direct subsidiary of Mayberry Holdings Limited, a wholly owned subsidiary of Mayberry Group Limited which is now the listed parent company of the Mayberry Group of companies.

Following last week’s delisting of MIL tranche III on the JSE Bond Market, there are now five securities on that market with two being MIL tranches and three being MJE tranches. MJE issued a $3.37-billion secured bond in June 2024, with each tranche raising at least $750 million each. MJE’s first tranche with a 9.25 per cent interest rate is due on July 19 while tranche II with a 10 per cent interest rate is due in August 2026.

The JSE Bond Market is set to see the listing of three new tranches from VM Investments Limited whose public bond offer garnered $6.6 billion in demand relative to the face value of $5.43 billion. That bond raise was also meant to refinance debt that was maturing for the investment company. Dolla Financial Services Limited is also set to list its recent $1.9-billion bond on the JSE Bond Market as well. That bond was meant to facilitate the growth of Dolla’s loan book and was also arranged by Mayberry Investments.

As with previous Mayberry bond offers, the minimum subscription amount is $20,000 with increments in multiples of $10,000. The offer opens on January 31 and is set to close on February 28. Existing Mayberry clients can subscribe on https://ipo.mayberryinv.com/mi-ipo while other investors can apply through selling agent Sagicor Investments Jamaica Limited. Investors can check
bondberryja.com to view the prospectus.