Wed | Nov 14, 2018

NWC gets financing pipeline from NCB

Published:Thursday | May 17, 2018 | 12:00 AMSyranno Baines/Gleaner Writer
Prime Minister Andrew Holness (second right) is accompanied by (from left ) Mark Barnett, president of NWC; Karl Samuda, minister without portfolio in the Ministry of Economic Growth and Job Creation; and Steven Gooden, CEO of NCB Capital Markets, in displaying the $15 billion bond issue raised by NCB Capital Markets for the NWC on Tuesday.

The National Water Commission (NWC) has announced the establishment of a $15 billion local bond facility through National Commercial Bank Capital Markets Limited (NCBCM).

The NWC said that the facility would enable it to become more financially viable to allow for the rebalancing of its loan portfolio and to reduce its use of government guarantees.

Speaking during a press briefing at Jamaica House on Tuesday, Prime Minister Andrew Holness said that a significant portion of the money would be used by the NWC to finance capital projects.

Holness listed pipe-laying, sewage, water treatment, and general repairs as some of the projects to be undertaken islandwide now that the NWC is financially stronger.

"That means that the people who I see in East Rural St Andrew, and the people who I hear complaining all over Jamaica that they don't have water, the NWC is in a better position to provide that," he declared.

"But more than that, because it is now a financially viable asset, it does not have to depend on government support or revenue to do it. It can now engage on equal footing with the private sector through public-private partnerships because it has a stronger balance sheet to execute these projects. This transaction sends a great signal to the market" he continued.

Earlier, the chairman of the NWC, Senator Aubyn Hill, said that the facility would also allow for the installation of 450,000 new smart metres.

Hill underscored that the NWC had a very large book of debt in foreign currency while all its revenues were in Jamaican dollars.

He noted that between 2013 and 2016, the total foreign exchange losses of the NWC was J$7.76 billion.

The senator pointed out that NCBCM won the bid after a request for proposal was issued to four local banks in March last year.

syranno.baines@gleanerjm.com

 

Conditions given and met by the winning bank

 

- There is no government guarantee for the new facility.

- The currency must be Jamaican.

- A substantial tranche of the offering must carry a 40-year tenure (J$5 billion of the J$15 billion will be repaid in 40 years at 13 per cent).

- Part of the proceeds of the bond must be used to pay off a portion of the syndicated loan, which two of the banks that were invited in the RFP, had.