With some of its debt maturing over the next year, the NCB Financial Group Limited (NCBFG) will be looking to refinance some of that debt with a new JM$15-billion corporate bond set to open today.
The financial conglomerate issued US$18.4 billion in indexed bond in September 2017 with a four year tenure at an interest rate of six per cent. This bond was listed on the Jamaica Stock Exchange’s bond market. NCBFG subsequently raised another US$105 million ($13.36 billion) from bonds in October 2017, which had a seven per cent interest rate with a tenure of 5 years.
In a release on the Trinidad and Tobago Stock Exchange website, NCBFG noted that the new JM$15-billion security it will be issuing is for a three-year senior unsecured corporate bond with a coupon rate of six per cent with the option to upsize to JM$22 billion. The offer will be arranged by its subsidiary, NCB Capital Markets Limited, and will be open from today (August 13), with an expected closing date of September 2.
An official from NCBFG explained that the term sheet would be available once the offer opens today. However, an e-mail sent to clients indicated that the minimum subscription amount would be JM$100,000.
In its 2020 audited financials, NCBFG, as a stand-alone company, had JM$68.49 billion up to the end of September as corporate notes, with another JM$6.37 billion owed to its subsidiary NCB Global Holdings Limited (NCBGL). The accompanying notes to the financials explained that the corporate notes had a maturity date between 2020 and 2023, while the NCBGL loan would mature on May 17, 2022.
NCBFG and its subsidiaries have been the largest entities to use the local and international capital markets to source capital for various needs. Its banking arm NCB Jamaica raised US$250 million (JM$35.53 billion) through the securitization of its payment rights in September 2020, which was used to retire part of its old 2013 issue and for general corporate purposes.
Guardian Holdings Limited raised $13.4 billion in the same month, which was injected straight into its Jamaican insurance business, Guardian Life Limited. This was done to strengthen its capital requirements ahead of its acquisition of the NCB Insurance Company Limited insurance portfolio.
NCBFG’s net operating income increased by 19 per cent to $31.09 billion for the third quarter, but its net profit attributable to shareholders fell by 23 per cent to $4.02 billion as total expenses rose faster than revenue growth. Total assets up to June 30 totalled $1.89 trillion, while its equity attributable to shareholders closed the period at $156.43 billion.