First Rock issues bond to back regional real estate deals
Real estate investor First Rock Capital Holdings has raised $700 million from a bond placed last Friday, funds it will use to finance property deals in the region, including previously disclosed projects in Costa Rica, the Cayman Islands and Guyana.
The bond, brokered by Sygnus Capital, will pay interest at 7.5 per cent per year and mature in 2026.
“All the transactions are being executed in areas outside Jamaica and form part of our diversification strategy,” said First Rock co-founder and CEO Ryan Reid. “It is a mixture of properties for rental, and one development,” he said.
The bond will double the debt at First Rock from US$3.8 million to US$8 million, but while the debt ratio will rise to just above a quarter of the company’s US$31 million of capital, it remains well within the 50 per cent marker that companies strive to stay below.
“We have one of the lowest debt-to-equity levels in the market,” said Reid.
First Rock Capital Holdings was incorporated in St Lucia in October 2017 and listed on the Jamaica Stock Exchange in early 2020, a month prior to the local onset of the pandemic. The top five shareholders are David Chin & Joyce Chin, JCSD Trustee Services-Sigma Equity, NMIA Airports Limited, Airports Authority of Jamaica, and Sagicor Pooled Equity Fund.
Last week, Finance Minister Dr Nigel Clarke indicated that the Airports Authority and NMIA Airports Limited, both public entities, were not given approval to invest in First Rock.
Reid steered away from commenting on the issue. “First Rock has more than 3,000 shareholders, they are many and varied,” he said.
First Rock investments are spread geographically, with Jamaica as the largest market, accounting for US$38 million of the portfolio, followed by Costa Rica at US$2.2 million, the United States, US$885,000, and Cayman Islands at US$570,000, as at year ending December 2020.
First Rock’s current investments include a 160-room multistorey complex in Costa Rica, Torres Los Yoses, being developed by Grupo Inmobiliario del Parque at a cost of US$18 million. First Rock, which is investing in Torres Los Yoses through subsidiary First Rock Capital Latam, has not disclosed the size of the stake nor the amount it is financing. The development has been under construction since February and should be completed in 2022.