MAYBERRY Jamaican Equities (MJE) Limited is seeking up to $2.25 billion from investors to refinance approximately $1.4 billion of existing debt, including secured bonds maturing this year, after a period in which the value of its investment portfolio and shareholders’ equity declined.

The investment holding company is initially offering $1.5 billion of secured bonds carrying interest of 9.5 per cent per annum and maturing after 36 months. It has reserved the right to increase the offer by another $750 million to a maximum of $2.25 billion.

The proceeds, the Jamaica Observer understands, will primarily be used to repay approximately $1.4 billion owed on an 8.75 per cent secured bond tranche due in October 2026, a 10 per cent secured bond tranche due this month, and to partially repay a revolving margin loan facility, according to the company’s August 13 prospectus.

At the initial $1.5-billion offer size, the identified repayments would account for most of the proceeds, making the transaction principally a refinancing of existing obligations. Expenses associated with the new issue are expected to be no more than $47 million, excluding general consumption tax.

The prospectus does not state how the approximately $1.4 billion is divided among the three obligations, making it difficult to determine whether the refinancing will increase or reduce MJE’s overall borrowing cost.

The refinancing comes as MJE’s shareholders’ equity has fallen substantially over the past 18 months.

Equity declined from approximately US$114.9 million at December 2024 to US$76.6 million at the end of 2025 and fell further to US$67.3 million at June 30, 2026.

That represents a reduction of about 41 per cent since the end of 2024, according to a Business Observer calculation based on figures in the prospectus.

MJE’s first-half loss narrowed this year.

The company recorded a net loss of US$7.7 million for the six months ended June, compared with a US$22.5-million loss in the corresponding period last year, an improvement of approximately 66 per cent.

Fair-value losses on investments in associated companies declined to US$4.7 million from US$15.8 million a year earlier. MJE said the improvement reflected better valuations during the second quarter after further weakness earlier in the year.

Dividend income moved in the opposite direction, falling approximately 51 per cent to US$383,000 from US$779,000. MJE attributed the decline largely to the timing and size of distributions from companies in its portfolio.

Interest expense increased by about 23 per cent to US$2.6 million from US$2.1 million.

The 9.5-per-cent rate on the proposed bonds sits between the rates on the two secured tranches identified for repayment. Without a breakdown of the balances attached to the 8.75- and 10-per-cent obligations or the cost of the margin facility, the effect on MJE’s weighted borrowing cost cannot be determined from the prospectus.

Total assets stood at approximately US$109.2 million at June, down from US$124.4 million a year earlier and about US$152 million at December 2024.

MJE said movements in its investment portfolio reflected a combination of net disposals and changes in market values. At June, the company continued to hold shares in 26 companies listed on the Jamaica Stock Exchange.

Its investment securities portfolio was valued at US$36.5 million at June, while investments in associated companies stood at approximately US$70.3 million.

Supreme Ventures Limited (SVL) accounted for approximately 56.2 per cent of MJE’s total portfolio value at the end of June.

MJE owned approximately 524.7 million SVL shares, representing 19.9 per cent of the betting and gaming company.

Its other long-term investments include stakes in IronRock Insurance Company, Dolla Financial Services, Wigton Energy, Jamaica Broilers Group, JMMB Group and NCB Financial Group.

MJE already uses portions of its equity portfolio as security for existing capital-market and margin-financing obligations. Part of the portfolio will also secure the new bonds.

Using the June 30 share prices stated in the prospectus, MJE identified a basket of shares valued at approximately $3.55 billion that can be charged in favour of bondholders.

The basket includes 99 million Supreme Ventures shares valued at approximately $1.63 billion, 225 million Dolla Financial shares worth $677.3 million, 25 million JMMB Group shares valued at $373.8 million, six million GraceKennedy shares worth $422.9 million and four million NCB Financial Group shares valued at $245.2 million.

At those values, the collateral would cover approximately 158 per cent of a fully upsized $2.25-billion bond issue, about eight percentage points above the minimum 150-per-cent coverage required under the financial covenants.

The value of that coverage will change with movements in the market prices of the pledged shares.

If the collateral ratio falls below 150 per cent, the security trustee can require MJE to add securities within the period specified under the bond terms to restore compliance.

The bonds also carry two leverage covenants. MJE must ensure net debt does not exceed 60 per cent of total equity and remains below 50 per cent of total assets.

The company must also establish an interest reserve equal to one quarter of the interest due on the bonds.

The covenants operate against a balance sheet that can change with movements in listed share prices because MJE carries much of its investment portfolio at fair value.

MJE combines long-term stakes in selected Jamaican companies with shorter-term trading positions. The company said its investment strategy includes holding shares it considers undervalued over the medium to long term while trading selected securities to take advantage of shorter-term opportunities.

The new bonds are scheduled to open for subscription on August 24 and close on September 10, subject to MJE’s right to shorten or extend the offer. The minimum subscription is $20,000, with additional investments in increments of at least $10,000.

MJE intends to list the securities on the Jamaica Stock Exchange’s Bond Market.

If the company exercises the full $750-million upsize option, the prospectus does not separately state how proceeds remaining after the identified refinancing and transaction costs would be deployed.

The transaction would extend the maturity of part of MJE’s existing funding while replacing obligations falling due in 2026. Under the bond terms, MJE must maintain collateral coverage of at least 150 per cent, while net debt must not exceed 60 per cent of total equity or 50 per cent of total assets.