RBC Capital Markets, in conjunction with RBC Merchant Bank (Caribbean) Limited, has successfully placed a US$300-million amortising bond issue for the Caribbean Development Bank (CDB) to bolster regional development and stimulate economic growth.
The 15-year fixed-rate bond bears interest of 4.375 per cent annually until maturity in 2027, and represents a significant investment inflow into the region, RBC said in a statement out of Port-of-Spain, Trinidad yesterday.
"Proceeds of the bond issue will be used to augment CDB's capital ratios further, particularly in the face of prevailing downward trending regional economic conditions and the marginal growth being experienced throughout the region," the bank said.
The bond is expected to have a positive impact on CDB's development initiatives, ultimately supporting funding for the bank's borrowing member countries, RBC added.
As outlined in its strategic plan 2010-2014, RBC said, CDB plans to assist member countries in confronting their major development challenges, as well as in implementing policies and strategies which would contribute to their economic and social development.
Chief executive officer of RBC Financial (Caribbean) Limited, Suresh Sookoo, said the bond issue reflected not only the bank's "commitment to regional capital market development, but also illustrates our ongoing drive to collaborate with organisations, like CDB, in the spirit of sustainable investment in the Caribbean."
"We believe that the bond arrangement between CDB and RBC is indicative of the intent of both parties to deliver best-in-practice, globally competitive and relevant financing solutions and support to our clients in the Caribbean," Sookoo added.
RBC Financial (Caribbean) Limited is the second-largest financial institution by assets in the English-speaking Caribbean, with branches in 20 countries and territories, and has a track record of successfully raising financing from local and regional bond markets.
The investment arm of RBC Financial (Caribbean), RBC Merchant Bank, is headquartered in Trinidad, and has regional reach with dedicated expertise within major Caribbean markets, including Jamaica, Barbados, the Eastern Caribbean and Central America, in addition to Trinidad and Tobago.
CDB is the region's only multilateral development financing organisation, and has the highest long-term debt securities rating of all Caribbean financial institutions, with an AA grade from Standard and Poor's, and an Aa1 rating from Moody's.
RBC (Canada) is rated A by Standard & Poor's and A1 by Moody's for subordinated debt.
This latest bond issue followed the successful execution of another in November 2012 for TT$300 million (US$50 million) between RBC Merchant Bank and RBC Royal Bank (Trinidad and Tobago) Limited.