Embarking on a financial journey, NCB Financial Group Limited is seeking $15 billion through a refined bond offer that offers nearly double the interest rate from three years prior. With the bond offer launching on July 22 and set to conclude on August 29, NCB Capital Markets Limited is taking the lead in brokering this venture.
- Private Market Trading: The security will not be listed on the Jamaica Stock Exchange; however, bondholders will have the opportunity to trade their bonds in $10,000 blocks on the private market, facilitated by the broker.
- Investment Options: The bond will be divided into three tranches, providing investors with choices based on their investment horizon and yield expectations. The tranches include coupons of 11.5 percent, 12 percent, and 12.5 percent, with respective tenors of two, three, and five years.
In its 2021 financial efforts, the conglomerate raised $15 billion at a 6.0 percent interest rate. The current bond offer is unfolding against a backdrop of heightened interest rates in the financial landscape.
- Flexibility: NCB Financial has the capability to repay the bond early, either in whole or in part, without incurring penalties.
- Debt Refinancing: Described as a "debt refinancing" initiative, the banking group elucidated that the principal repayment would be executed in full upon maturity. Noteworthy covenants have been outlined in the term sheet, emphasizing the group’s obligation to maintain capital above 10 percent of its assets and uphold the solvency of its subsidiaries.
- Strict Guidelines: The term sheet also outlines provisions for "mandatory principal repayment" in the instance of default. Furthermore, all accrued interest would promptly become due and payable if the issuer discontinues as a going concern or expresses an intent not to honor obligations under any facility.
Majority-owned by entrepreneur Michael Lee-Chin, NCB Financial is positioning the bonds as highly-rated debt securities, to be registered with the Financial Services Commission, with JCSD Trustee Services Limited assuming the trusteeship.
In a recent endeavor in June, NCB Financial endeavored to raise $5 billion, with plans to potentially increase to $7.5 billion through an additional public offering of ordinary shares on the stock market. Despite concerns about the APO pricing, resulting in a $2.5 billion raise, this move still stands as the largest capital-raise this year on the equities market.
Evident in the banking conglomerate’s financials is the possession of approximately $152 billion in corporate bonds due by 2025, with an earlier bond offering this year amounting to US$50 million. The latest bond offer signifies a step towards fortifying the group’s capital following a less-than-stellar APO last month.
Should you wish to delve deeper into this financial saga, feel free to reach out to [email protected].
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