Finance Ministry hits $15b bond target
The Ministry of Finance successfully raised $15 billion in its return the domestic capital markets with three bonds ranging from two to 30 years.
The issue of these instruments represents a reactivation of the domestic market and was undertaken within the context of the GOJ’s payment of a $60.4 billion maturity on February 11, 2016, stated the Ministry of Finance in a release.
The bond issues included a two-year tenor with a maturity date of February 12, 2018 at an interest rate of 6.625 per cent; a six-year tenor with a maturity date of February 11, 2022 at an interest rate of 7.75 per cent; and a 30-year tenor with a maturity date of February 12, 2046 at an interest rate of 11.25 per cent. Interest will be paid semi-annually on all the bonds.
Interest will be paid semi-annually on each of the bonds.
For fiscal year 2016/17, the finance minister has said, Jamaica will not tap the capital markets for financing. But Government will maintain a presence in the domestic capital market, facilitating development of both the primary and secondary markets.
Bank of Jamaica said it estimates that net flows from the NDX 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.