NCB Financial Group Limited is hunting $15 billion in a refinanced bond offer that almost doubles the interest rate offered three years earlier.
The bond offer opened July 22 and closes August 29, with NCB Capital Markets Limited acting as the lead broker.
NCB Financial does not intend to list the security on the Jamaica Stock Exchange, but bondholders will be able trade their bonds in blocks of $10,000 on the private market, facilitated by the broker.
The bond will be divided into three tranches providing investors with options based on their investment horizon and yield expectations.
The bond is priced in three tranches with coupons of 11.5 per cent, 12 per cent, and 12.5 per cent, and tenors of two, three and five years, respectively.
In 2021, the financial conglomerate and operator of Jamaica’s largest bank raised $15 billion at 6.0 per cent. The current offer is occurring within an environment of elevated interest rates.
NCB Financial can repay the bond early “in whole or in part, without penalty”.
The current bond offer is for “debt refinancing”, the banking group said.
As customary, the principal repayment will be made in full at maturity. The term sheet, however, added a series of covenants for the group to maintain, including keeping capital above 10 per cent of its assets, and keeping its subsidiaries solvent.
The term sheet also indicates “mandatory principal repayment” in the event of a default. Also “all accrued interest will become immediately due and payable”, even if the “issuer ceases as a going concern”, or declares it “does not intend” to honour its obligations under any facility.
NCB Financial is majority-owned by businessman Michael Lee-Chin.
The bonds will be registered with the Financial Services Commission as highly-rated debt securities. JCSD Trustee Services Limited will act as the trustee.
In June, NCB Financial tried raising $5 billion with plans to upsize to $7.5 billion through an additional public offering of new ordinary shares on the stock market.
However, the offer failed to garner widespread market support, due to concerns about the pricing of the APO, which ended up raising $2.5 billion. Despite this, the offer was the largest capital-raise, year to date, on the equities market.
The banking conglomerate’s financials indicate that it holds some $152 billion in corporate bonds that are due by 2025. The company already raised some US$50 million earlier this year in bond offers.
The new bond offer is the latest move to bolster the capital of the group following its lacklustre APO last month.