Financial institutions chasing billions through bond offerings
NCB Financial Group is looking to raise up to $5.2 billion through a bond.

FOLLOWING the closure of Mayberry Investments Limited's (MIL) $7-billion secured public bond offering last Friday, other financial institutions have announced their own multi-billion-dollar offers as they capitalise on excess liquidity in the environment.

The Mayberry Investments bond offering was the largest ever on the Jamaica Stock Exchange's (JSE) bond market since the relaunching in October 2013. Mayberry intends to list the four tranches of the bond within 21 days of the closing date on the JSE, which will push the number of securities to six on that market.

"We have a strong demand for margin loans, which we do a lot of that type of business — that's lending against people's listed stocks on the JSE. The rest of the money, we're pretty much going to be holding it for trading opportunities," said Chairman Christopher Berry at a Mayberry Jamaican Equities Limited (MJE) investor briefing last Thursday.

Its tranche IV closed on December 23, tranche III on January 12, tranche II on January 17 and tranche I on January 20. The offer had been open since December 2. Mayberry will hold its hybrid annual general meeting on March 1 at the Courtyard by Marriott at 2 pm.

Mayberry Investments had a consolidated loans and other receivables book of $7.92 billion in September which was up 55 per cent since the start of 2022. Senior Vice-President Dan Theoc highlighted that MJE borrowed more funds via margin loans, with MIL to fund the growth of its portfolio during 2022. He also added that there was almost $1 billion worth of excess applications in each tranche. The amount due from the parent company line increased from $9.78 million to $1.04 billion in 2022 as per the unaudited financial statements.

Barita Investments Limited posted on the JSE last Thursday that it would be seeking to raise up to $8 billion by way of issue of corporate bond facilities over four tranches. The issue will be by way of private placement under the Financial Service Commission's exempt distribution guidelines and is expected to close by February 28.

NCB Financial Group Limited (NCBFG) is also seeking to raise $3.5 billion with an option to upsize to $5.2 billion over two tranches. The minimum subscription amount is $100,000 with minimum trading blocks of $10,000. Tranche A would be for two years at 10.75 per cent while tranche B would be for three years at 11.75 per cent. The bond is also set to be listed on either the JSE's bond or private market, with applications processed on between January 12 to 30.

There was recently a $5.8-billion bond offer by Victoria Mutual Investments Limited, a $4.5-billion bond offer by NCB Capital Markets Limited, and JMMB Group Limited's $5.25-billion raise.

These offerings were all above 10 per cent in Jamaican dollar terms, which reflects the increased interest rates by the Bank of Jamaica (BOJ) and market overall. However, the tenure ranged from 18 months to five years as many firms expect interest rates to cool down shortly. The BOJ's policy rate is 7.0 per cent with February 20 set for the next monetary policy committee meeting.

"One of the reasons we left it open is that there was a huge maturity last week [January 13]. There's a $43-billion government paper that matured and the Government only put in new instruments that totalled approximately $20 billion. So, there was $20 billion there and you had some customers who would like to participate in the bond. What we've seen since we left it open is that tranche II closed about a day or two after people got their funds from that and tranche I is available," said Mayberry Investments Chief Executive Officer Gary Peart.

Barita's $8-billion bond offer coincides with the promotion of different executives at the securities dealer. Terise Kettle and Geoffrey Romans were promoted to senior vice-presidents for their roles while Sonia Owens was promoted to a vice- president role effective October 1, 2022. Barita's asset base stood at $109.7 billion with $32.18 billion in shareholders' equity/capital.

BY DAVID ROSE Observer business writer

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