Finance ministry to float three bonds
The Ministry of Finance will offer three bonds to the market on Thursday and Friday, aimed at raising $15 billion.
The largest of the offers which has a fundraising target of $8 billion relates to an existing bond being reopened at its fixed coupon rate of 11.25 per cent up to maturity in 30 years in year 2046.
All three bonds will carry fixed coupons. A two-year bond offered at 6.625 per cent to maturity in 2018 aims to raise $4 billion, while a six-year instrument priced at 7.75 per cent to maturity in 2022 aims to raise $3 billion.
All three bonds will pay interest half-yearly, starting August 11.
Jamaica is returning to the domestic capital market after a three-year hiatus to sop up some of the liquidity expected from its February 11 payout of $62 billion on its NDX bonds.
Bank of Jamaica says it estimates that net flows from the payout will amount to $48 billion, of which $8 billion will flow directly to the central bank and $15 billion back to Government of Jamaica via the bond floats. The central bank anticipates that out of the other $25 billion, lenders will ramp up loans to the productive sector, and some of the funds will finance tax returns, due in March, among other expenses.
The central bank said last Friday that it does not expect the NDX payout to derail the local currency nor inflation targets.