AS NCB Financial Group Limited (NCBFG) continues to reduce its debt balance it is set to refinance about $10.04 billion in arrears through the issuance of new bonds on the capital markets.

NCBFG recently launched two bonds to refinance maturing debt, with these offerings set to close in the coming days. The Jamaican-dollar (JMD) bond opened on February 26 with NCBFG seeking to refinance $5 billion between two tranches, with the option to upsize it to $7 billion. Tranche A of the bond is seeking to raise $2 billion at an interest rate of 10 per cent with a 2.5-year tenure, while tranche B is seeking to raise $3 billion at a 10.50 per cent interest rate with a five-year tenure. This bond is scheduled to close today, with investors able to subscribe with a minimum of $100,000 and in increments of $10,000.

With respect to the United States-dollar (USD) bond, that security opened on March 18 with NCBFG seeking to raise US$19.50 million ($3.04 billion) across three tranches. Tranche A is seeking to raise US$3.25 million at an 8.00 per cent interest rate with a two-year tenure, tranche B is seeking to raise US$6.50 million at an 8.25 per cent interest rate with a three-year tenure, and tranche C is seeking to raise US$9.75 million at an 8.50 per cent interest rate. This bond is scheduled to close on March 31, with investors able to subscribe with a minimum of US$10,000 and in increments of US$1,000. Both bonds will pay interest semi-annually but neither instrument will be listed on the JSE Bond Market.

“We will just look to roll over. The strategy overall is [to] reduce debt and, as I said in the last [briefing], we’ve reduced debt by 10 per cent. So, one part of it is to reduce debt — how do we reduce debt? We reduce debt by selling non-core assets, by recalibrating and finding assets that are not producing or non-core to our business and seeking to monetise them. We refi the rollovers, like what happens in the capital markets for most businesses. As interest rates are going up we’re bringing down debt so that our debt service cost doesn’t escalate too much. We continuously seek to diversify our overall funding base,” said NCBFG CEO Robert Almeida at NCBFG’s February annual general meeting (AGM).

NCBFG as a standalone entity has a $90.72-billion debt balance which is equally split between JMD and USD. Some $62.99 billion of that debt that is deemed current for its current 2025 financial year which ends on September 30. US$85 million ($13.41 billion) of this debt is currently owed to its subsidiary NCB Global Holdings Limited, the entity which owns ordinary shares in Guardian Holdings Limited (GHL). If this balance owed to NCB Global Holdings is adjusted to the amount due in 2025, NCBFG’s current debt balance would be reduced to $49.57 billion.

NCBFG has been moving to reduce its debt balance under the new EGC (efficiency, governance and customer experience) focus of NCBFG Chairman Michael Lee-Chin. It raised a net amount of $2.41 billion in fresh equity through an additional public offering (APO) in June 2024.

Since then, NCBFG completed a $15-billion refinancing round in September 2024 and continues to refinance its maturing debt balances. However, this has resulted in NCBFG’s interest cost going up as the cost of its debt on some refinanced instruments would go up from six to the 11 per cent region.

NCBFG has also been seeking to sell non-core assets in recent times. Its sale of NCB (Cayman) Limited didn’t pan out as planned since the sale to Berkeley Financial Holdings Limited was terminated in January due to the transaction not being completed in the stipulated timeline. NCBFG continues to advance the sale of a 30.20 per cent stake in Clarien Group Limited to Cornerstone Financial Holdings Limited.

“The Clarien sale continues to be under contract while Guardian just completed the sale of Thoma. We will continue to look at strategic opportunities related to NCB Cayman. We’re going to monetise them [in] some way,” Almeida added on the sale of some subsidiaries.

NCBFG’s second-quarter report is set to be published around May 8, which is when the financial conglomerate should also consider a dividend payment to shareholders. NCBFG’s board pushed back its dividend consideration from February 12 to a special meeting later this quarter, which is set to end on March 31. GHL is also set to publish its audited financial statements by March 31.

NCBFG’s stock price closed Tuesday at $44.74, which leaves the stock down 12 per cent in 2025 with a market capitalisation of $115.61 billion. NCBFG’s stock hit a nine-year low and new 52-week low of $40.10 on March 20.