Fri | Sep 20, 2019

NCB Capital reports full take-up of US$180m New Fortress bond

Published:Sunday | September 8, 2019 | 12:27 AM
NCB Financial Group headquarters, The Atrium at Trafalgar Road, New Kingston.
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Natural gas supplier to Jamaica and the region New Fortress Energy announced on Friday the closure of its US$180-million bond which NCB Capital Markets, arrangers of the deal, said was fully subscribed.

NCB Capital Markets CEO Steven Gooden said the deal received commitments from institutional and high net worth individuals from across the region.

The proceeds will fund construction of a combined heat and power plant being built in Clarendon. The bond, which opened on August 29 and closed on September 5, represented one of the largest raises in the Caribbean.

“We wanted to enhance our great partnership with Jamaica by giving investors a stake in this historic achievement by the country,” New Fortress Chairman and CEO Wes Edens was quoted as saying in a statement.

“Jamaica continues to be a model for the Caribbean, and we’re looking forward to turning on the plant in the coming months,” he added.

The plant will supply electricity to utility provider Jamaica Public Service Company and steam to alumina producer Jamalco.

Secured and unsecured bonds

NCB Capital Markets structured the offer as a combination of secured and unsecured bonds, which matures in 15 years and 17 years, respectively.

Under the facility, the company plans to issue up to US$180 million of bonds comprising up to $136.3 million of 8.25 per cent secured long-term fixed rate bonds due 2034, and up to $43.7 million of 11 per cent unsecured long-term fixed rate bonds due 2036, stated New Fortress.

Initially, US$117 million of bonds were issued on September 5, with the remaining US$63 million set for issuing upon completion of construction of the company’s combined heat and power facility in Clarendon, set for the first quarter of 2020.

Net proceeds from the issuance will be used to complete the construction of the power plant and to reimburse shareholder advances made by New Fortress.

“NCB Cap has decided to partner with New Fortress because of the work that they have been doing across the region and in different parts of the world in bringing cleaner and cheaper energy sources to consumers,” said Steven Gooden, CEO of NCB Capital Markets.

“Liquefied natural gas is a cleaner and more efficient source of energy, and one of its major customers, Jamalco, is a significant player in the mining industry which is a major contributor to GDP. Lower energy cost bodes well for us as consumers and the economy on a whole,” Gooden added.

New Fortress Energy, based in the United States, supplies and produces natural gas for clients around the Caribbean and, increasingly, the world. New Fortress Energy is majority-owned by a fund managed by an affiliate of Fortress Investment Group.

business@gleanerjm.com