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Starbucks operator Caribbean Coffee floats US$30m bond

Published:Sunday | May 17, 2020 | 8:22 AM

Caribbean Coffee Traders Limited, CCTL, is moving ahead with plans for a US$30-million bond placement, the proceeds from which it will likely use to expand the Starbucks chain it operates in three regional markets.

The initial franchise agreement is for Starbucks to develop 15 stores in Jamaica, Turks & Caicos Islands and Cayman Islands, as noted by the broker and arranger of the bond placement Mayberry Investments Limited. Caribbean Coffee currently operates seven stores in Jamaica.

The fixed rate bond, which bears a coupon of 6.5 per cent, will mature in five years.

“The company will authorise the issue and sale of fixed rate 6.5 per cent secured notes due 2025 valued at up to $4.2 billion, equivalent to US$30 million,” said Mayberry. “There’s no exposure to price fluctuations and the principal remains stable over the life of the note.”

Subscribers to the bond are to pay by May 20, the broker said. The minimum investment is US$10,000.

Caribbean Coffee Traders is a joint venture of the Ian Dear-controlled Margaritaville Caribbean Limited and Adam Stewart, the CEO and deputy chairman of Sandals Resorts International. Dear did not respond up to press time on how the debt capital would be deployed.