Jamaica Money Market Brokers (JMMB) will be offering two sets of preference shares to investors come next week in search of fresh capital to expand in markets where the group currently operates.
The offers, which open on August 21 and closes August 30, aim to raise J$751 million.
The first trenche of the offer priced at J$2 per share will sell 313 million pref units exclusively to existing JMMB clients and shareholders. The stock will pay dividend monthly at 7.5 per cent per annum over five years.
The second tranche of 50 million units on offer to the entire market aims to raise J$125 million at J$2.50 per unit. The stock will also pay dividend monthly for five years at a rate of 7.25 per cent. This offer will represent 3.97 per cent of the company's issued preference share capital, while the former will represent 24.8 per cent after the offer, JMMB said.
JMMB has been using pref issues for fundraising since 2007, when it tapped the stock market for J$2.5 billion. It currently has two preference stocks on the market, which pay monthly dividend at 8.5 per cent and 8.75 per cent per annum.
Paul Gray, group chief investment officer, said this strategy is a perfect fit for what the company needs in terms of flexibility as the offer - with a tenor of five years and scheduled dividend payments - would qualify as Tier 2 capital.
"So we can immediately put it in our capital, and this would boost our regulatory capital," Gray said.
JMMB said the funds raised would finance business growth but declined to give details at the formal announcement of the pending offers on Thursday.
"This offer is a precursor to our ability to take advantage of certain opportunities as they present themselves," he said.
Executive Director Donna Duncan-Scott said the company's strategy is to grow organically through acquisitions in its existing markets.
"In Jamaica, we want to generate growth through increased synergies from the recent acquisitions; and it is also public knowledge that we are trying to acquire the other 50 per cent of the IBL banking group in Trinidad. This will allow us to round out our integrated financial-services model in Trinidad and Tobago" said Duncan-Scott.
"In the Dominican Republic, we continue to look for opportunities to build out the integrated financial-services model."
The preference shares are to be listed on the Jamaica Stock Exchange.