Sygnus Credit Investments Limited (SCI) has adjourned the general meetings for two classes of preference shares due to the inability to form a quorum for either meeting.

SCI held two separate general meetings at the AC Hotel on Tuesday to consider adjusting the terms of its class C (10.50 per cent J$) and class D (8.00 per cent US$) cumulative redeemable preference shares. However, neither meeting could move forward as the class C meeting had 46.81 per cent of value present in person or proxy while the class D meeting had 41.4 per cent of value present in person or proxy.

Both meetings require a quorum of at least two shareholders owning at least 50 per cent of the value for the business of each meeting to be conducted. Due to this formality, both meetings were adjourned from August 26 to September 9 with the class C meeting to be held at 10:00 am and class D meeting at 11:00 am.

“Since the business of today’s meeting involves the variation of the rights of the class C preference shareholders, the requirements to achieve a quorum are necessarily very high to protect your interest. In keeping with the terms of issue of the class C preference shares, I now adjourn the proceedings of this meeting,” stated Acting Chairman Horace Messado in the class C general meeting.

Both class C and D preference shares are set to mature on December 22. SCI sought permission from preference shareholders to extend the maturity of both preference shares by three years to December 2028 and adjust the class C dividend yield from 10.50 per cent to 9.85 per cent and adjust the class D dividend yield from 8.00 per cent to 7.50 per cent.

However, the absence of the required quorum means that the existing terms remain in effect. The face value of the class C preference shares is $1.6 billion (US$9.92 million), while the class D preference shares have a face value of US$16.78 million. The class C preference shares were issued at $100 per share while the class D and E preference shares were issued at US$10 per share.

“The revised pricing for the Class C Shares has been structured to maintain attractive returns for investors, in light of prevailing market conditions. At the time of the offer, the Bank of Jamaica’s policy rate stood at 7.00 per cent, and Government of Jamaica Treasury Bills were yielding between 7.91 per cent and 8.42 per cent. As of June 2025, the policy rate has declined to 5.75 per cent, and by July 2025, Treasury Bill yields have fallen to between 5.19 per cent and 5.37 per cent,” SCI explained in its shareholder advisory as the rationale for the class C preference shares.

Most issuers of debt like instruments tend to refinance maturing debt by issuing new preference shares or receiving new debt financing. However, an issuer can request the permission of the owners to vary the terms of the arrangement.

JMMB Group Limited was able to achieve approval from its investors which exceeded 95 per cent for the extension of its preference shares at general meetings in December 2023 and March 2025. However, with JMMB Group seeking to extend the maturities by at least six years, investors were compensated with higher interest rates and additional benefits.

For example, investors in the USD preference shares received an additional 175 and 250 basis points (2.50 per cent) on the original dividend yields while JMD preference shareholders received a higher fixed dividend yield for one year, a higher fixed amount for subsequent rate adjustments and a guaranteed 6.00 per cent floor. That meant investors would be guaranteed 6.00 per cent as the base minimum even if the reset rate is lower than that figure.

While JMMB Group was unable to form a quorum for two preference shares at its December 2023 general meeting, the face value of these two preference shares totalled $62.33 million and JMMB Group redeemed those preference shares. As a result, it did not reconvene the two adjourned general meetings.

SCI’s class E preference shares are set to mature in December 2026 at US$10 per share with a face value of US$23.22 million. The class C and class D preference shares closed Tuesday at $105.91 and US$9.98, respectively. The class E preference share closed at US$9.66.

SCI sought the preference share extension before its June 2025 audited financials were set to be published by August 29. SCI’s income for the nine months period ending March 31 increased 17 per cent to US$12.36 million as it benefited from higher interest income and fair value gains. Despite a 12 per cent rise in expenses to US$5.05 million, the consolidated net profit grew 60 per cent to US$6.97 million.

SCI’s asset base grew 15 per cent over the nine months to US$228.41 million, with investments worth US$214.63 million. Total liabilities and shareholder’s equity was US$152.55 million and US$75.86 million, respectively.

Caribbean Information & Credit Rating Services Limited reaffirmed the ‘adequate’ creditworthiness of SCI with a CariBBB- and jmBBB+ credit rating. The report revealed that preference shares made up 30.5 per cent of its total earning assets in December 2024. Short -term notes made up 27.7 per cent, medium term notes made up 25.4 per cent, and revolving receivables programme and sales repurchase agreements made up the balance.