Sat | Apr 29, 2017

JMMB bonds bolster cash, bank capital

Published:Friday | June 5, 2015 | 6:00 AM

Debt financing raised across the JMMB Group last year was used to boost the capital base of its commercial banking arm in Trinidad and otherwise position the company for new investments and retire more expensive loans.

The two bond issues added $3.64 billion to JMMB's debt, which climbed to $196 billion in total, inclusive of $144 billion of repo liabilities.

Intercommercial Bank Limited raised TT$80 million ($1.349 billion) from an eight-year bond, which Group Chief Investment Officer & Treasurer Paul Gray said was used to bolster the banking subsidiaries tier-two capital. The TTD bond pays interest at a fixed 4.5 per cent and will mature in 2022.

JMMB Group also issued a bond via private placement that raised $2.95 billion, which was used for "general corporate purposes to bolster financial flexibility and take advantage of market opportunities," Gray said.

The unsecured debt was raised at 6.75 per cent interest. The debt is due to mature in one year but bondholders have the option of extending the maturity for a year to July 2019 at 7.75 per cent per annum.

The bonds proceeds served to bolster the company's cash position. Still, by the close of its financial year in March 2015, JMMB's cash hoard had declined from $23 billion to $18 billion.

Profit fell for the group from $3 billion to $2 billion due to larger expenses and staff costs.

avia.collinder@gleanerjm.com