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Guardian $13.5 billion bond was part financing for NCB annuities portfolio

Guardian Holdings has disclosed on the Trinidad and Tobago Stock Exchange (TTSE) that the $13.5 billion bond issue made by NCB Financial Holdings was to assist its Jamaican operations with paying for its newly acquired annuities portfolio from NCB Insurance Limited.

Guardian Holdings Limited’s headquarters in Trinidad and Tobago (File photo)

In July, NCB Financial Group Limited announced its intention to streamline the insurance business currently offered by its competing subsidiaries – NCB Insurance Company Limited and Guardian Life Limited.

Guardian Life has sold insurance in Jamaica since 1999, and has been engaged in the underwriting of all classes of long-term insurance business.  The company has ten branches across Jamaica.

Guardian made the disclosure regarding its bond issue to the Trinidad and Tobago Stock Exchange.

Its parent company stated that the NCB Insurance portfolio acquisition by the Jamaican unit will increase bancassurance – the selling of life assurance and other insurance products by banks. The acquisition which took effect September 30.

To assist the Jamaican subsidiary with the acquisition, Guardian Holdings issued the $13.5 billion in senior secured corporate notes (bonds). Registered with Financial Services Commission, they were approved for sale in the Jamaican market.

National Commercial Bank Jamaica (File photo)

The GHL bond, for which NCB Capital Markets acted as lead arranger and broker, had five tranches.

Tranche A was a $2-billion issue spanning two years at 5.75 per cent; tranche B spanned five years at 6.5 per cent and aimed to raise $4.2 billion; tranche C spanned six years at 6.75 per cent, targeting up to $2 billion; tranche D spanned seven years at 7.0 per cent, with a fundraising target of $4.2 billion; and tranche E was for $1-billion, spanning 10 years at 8.75 per cent.  The minimum subscription was $1 million.

NCB Financial has indicated that it will use the proceeds of the bonds, for future acquisitions.

In mid-2019, NCB Financial  finalised the acquisition of an additional 74.23 million shares in Guardian Holdings Limited, which doubled its ownership of the regional insurance group to 62 per cent at a cost of US$207 million ($28 billion).