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New Fortress raising US$185m for Clarendon LNG project

Published:Friday | August 16, 2019 | 12:25 AM
Wes Edens, CEO of New Fortress Energy LLC.
Wes Edens, CEO of New Fortress Energy LLC.

Fast-growing natural gas supplier New Fortress Energy, NFE, aims to raise some US$185 million from a bond issue brokered by NCB Capital Markets Limited.

The bond is targeted at institutional investors from around the region, and would represent one of the largest raises in the Caribbean.

The proceeds will fund construction of a combined heat and power plant being built in Clarendon to supply electricity to power utility Jamaica Public Service Company and steam to alumina producer Jamalco.

The offer opened this week and will close on August 29.

NCB Capital said it structured the US$185-million offer as a combination of secured and unsecured bonds. The broker said the secured debt, which matures in 15 years, would pay a coupon rate of 8.5 per cent per year, and “a more attractive” rate on unsecured tranche, which matures in 17 years.

NCB Cap is the sole broker for the transaction. The bond will not be listed.

“We believe that the offer will benefit our accredited investors as it will assist them to create a more balanced portfolio. In the last few months, there has been a lot of focus on the equities market and this attractive bond offer is another opportunity for suitable investors to enhance portfolio returns while minimising concentration risk,” the broker said.

New Fortress, which is listed on the Nasdaq exchange, said in market filings that it will build and own the 150-megawatt power plant at Jamalco. The plant is set for testing and receiving its first gas deliveries by the fourth quarter of 2019. The run rate will start in the first quarter of 2020, added NFE in filings.

The American company is the sole supplier of natural gas to Jamaica. It owns terminals in Montego Bay and Old Harbour.

New Fortress Chairman and CEO Wes Eden was said to be rock climbing and was unavailable for comment on the bonds.

NFE listed earlier this year at US$14 per share on the Nasdaq exchange. The stock has fallen sharply since its listing to hit a low of $9.70 in June, but has now rallied to just under US$15, following reports in August in which the company said its rapid growth places the intrinsic value of the stock at US$100.

NFE revenue grew by about a third to US$40 million in the second quarter.