Thu | Sep 20, 2018

JMMB raises $6.9b from upsized offer

Published:Wednesday | January 20, 2016 | 12:00 AM
JMMB Group CEO, Keith Duncan

JMMB Group Limited raised $6.9 billion from its preference share offer, or more than twice the amount it went after.

The financial company aimed to raise US$12 million ($1.4 billion) and $1.6 billion in Jamaican currency for a total of $3 billion through four tranches of prefs.

But the market apparently thought the 5.75 per cent and six per cent fixed interest rate on the US dollar instruments were very attractive as JMMB received some US$47 million ($5.6 billion) in bids.

"There was an overwhelming response to the US dollar offer, which was oversubscribed by 291 per cent, demonstrating the desire of investors to hold a diversified portfolio that includes hard-currency assets," said Paul Gray, JMMB's chief investment officer and treasurer.

The Jamaican-dollar instruments, which carry variable rates (the 180-day weighted average treasury bill yield plus one percentage point) starting at 7.25 per cent and 7.5 per cent, attracted $1.9 billion in bids, making them 17 per cent oversubscribed.

JMMB upsized the offer by $3.8 billion, opting not to satisfy all US dollar bids, to raise $6.9 billion overall.

Part proceeds of the offer, which opened January 4 and closed January 14, will replace preference shares valued at $2.76 billion, which matured January 7, 2016. JMMB plans to make an application to the Jamaica Stock Exchange to list the new prefs.

The offer formed part of the group's capital management strategy, as it seeks to build out its regional subsidiaries and expand its business lines in the territories in which it operates.

"As a group, we continuously seek to create win-win solutions for investors, and the performance of this preference share offer demonstrates that once again, we were able to deliver the value proposition," said Gray.

net profit

JMMB earned net profit of $1.2 billion on net interest income of $2.77 billion over six months ending September 2015, or roughly 20 per cent more profit than a year earlier.

"The years ahead promise to be exciting for the JMMB Group as we embark on a new chapter in our journey to become the premier Caribbean-grown financial group and premier financial-services group of choice across the region," said the company in the preference-share prospectus.

The JMMB Group serves approximately 220,000 clients in Jamaica, Trinidad & Tobago, and the Dominican Republic combined. It provides investments, banking, remittances, and insurance brokering services.