Sun | Nov 29, 2020

Sagicor Financial to raise US$76m for debt refinancing

Published:Friday | August 2, 2019 | 12:17 AM
Dodridge Miller, CEO of Sagicor Financial Corporation.
Dodridge Miller, CEO of Sagicor Financial Corporation.

Sagicor Financial Corporation (SFC) which operates insurance services across the region, plans to raise US$76 million from a bond placement.

A source intimate with Sagicor’s debt structure said the funds will be raised in August and should be seen as refinancing rather than capital for acquisitions.

“Sagicor has more than enough cash. So this is for refinancing,” said the person, who spoke on condition of anonymity because they were not cleared to comment on the issue. Sagicor Financial is yet to respond to a request for comment.

It’s understood that the coupon rates for the notes are still being finalised, but ratings agency CariCRIS said the funds would be raised in US dollar and Jamaican currency.

The source said the new bonds will carry similar coupon rates, whether denominated in local or US dollars.

The new debt is being raised just as a US$75-million note issued in March 2016 becomes due for redemption. The 14-month note was initially repayable in 2017 and carried a 5.0 per cent annual rate of interest, but was extended prior to maturity at an annual rate 4.85 per cent with a maturity date of August 14, 2019.

Sagicor Financial Corporation held US$505 million of bonds and loans at year ending 2018. Its largest individual note had a fair value of US$334.6 million.

AAA rating

The new debt issue has already received an investment-grade rating from CariCRIS of CariAA on its regional scale, and jmAAA on the Jamaica national scale, with a stable outlook.

The stable outlook is based on CariCRIS’ expectation of continued revenue growth and profitability for Sagicor Financial over the next 12 to 15 months, “supported by Alignvest’s US$450-million capital injection which will bear favourably on the group’s capital adequacy,” the rating agency said.

In June, Sagicor Financial completed an agreement with Alignvest of Canada for the takeover of SFC by Alignvest Acquisition II Corporation.

steven.jackson@gleanerjm.com