Mon | Dec 11, 2017

NCB Financial Group raises $18b, lists bond on JSE

Published:Friday | September 29, 2017 | 12:00 AMSteven Jackson
Steven Gooden, CEO of NCB Capital Markets Limited.

A new bond issued by NCB Financial Group Limited raised $18.4 billion for the banking group, and was subsequently listed on the Jamaica Stock Exchange, JSE, on Wednesday.

It's the largest debt security to list on the nascent JSE bond trading platform, alongside a small pool of corporate bonds.

The placement and listing were arranged by subsidiary NCB Capital Markets Limited. It's the first big fundraising disclosed by the parent company since the restructuring of the conglomerate was finalised earlier this year, placing the banking, insurance and wealth subsidiaries under the umbrella of NCB Financial Group.

NCB Financial will use the funds raised for corporate activities, but there is no definitive acquisition target in mind, said NCBCap CEO Steven Gooden.

"The raise was for general corporate purposes. NCBFG is a relatively new company and as such, we are building out capacity to pursue various investment opportunities," said Gooden.

He added that the US-indexed bond, which is denominated in Jamaica dollars, is likely the largest offer made to sophisticated investors in the Jamaican market. It is also the largest from a member of the NCB family, in which the last big fundraising was a $10-billion bond issued by NCBCap itself in May.

The NCB Financial offer opened in July and closed a month later in the third week of September. The bond will pay interest at six per cent per annum until maturity

in four years. The Financial Gleaner understands that the issue was timed to attract the added liquidity that flowed into the market as a result of the early redemption of roughly US$520 million worth of Government of Jamaica bonds in August.

"A number of institutional investors participated in the offer, including fund managers and securities dealers," Gooden said.

NCB Financial Group is Jamaica's largest banking conglomerate with assets of $665 billion in the June quarter.

The group's liabilities amount to $553 billion, of which more than half, or $293 billion, is customer deposits, while another $104 billion relates to repos.

NCB's last big acquisition was a 29.99 per cent stake in Guardian Holdings Limited of Trinidad in May 2016, at a cost of $28 billion.

steven.jackson@gleanerjm.com