Mayberry floating $5b bond
Mayberry Investments Limited is seeking to raise $5 billion from a bond that will be issued in four equal tranches and tradable via the stock exchange.
The tranches of $1.25 billion each span 13 months at an annual interest rate of 9.25 per cent, 18 months at 10 per cent, 24 months at 11 per cent, and 36 months at 12 per cent.
Mayberry is also considering upsizing the bond to $7 billion under the offer that runs from December 2 to January 2.
The investment company, which quadrupled its profit to $4 billion in the nine-month period ended September, intends to use the proceeds “to expand its portfolio of securities loans” as well as general purposes.
By floating the bond via the Jamaica Stock Exchange, Mayberry is seeking participation not only from wealthy accredited investors but also the general public. Subscribers can buy into the bond with as little as $20,000, compared to the millions generally required for wealthy investors. The bonds are to be listed on the JSE bond market after issue.
“For retail investors that are not able to invest as accredited investors, there has been very little opportunity to invest directly in short- to medium-term debt instruments of local blue-chip companies. That has led some retail investors to have portfolios that are heavily overweight in equities,” said Mayberry Chairman Christopher Berry.
In the past six months, however, the “extreme volatile” securities markets provides challenges for investors who want a return, or cash flow, he added.
“In such times, having exposure to fixed-rate, secured debt that matches the investor’s need for funds can provide a valuable cushion to ride out the inevitable dips in equities,” said Berry. “Accordingly, Mayberry believes that now is the opportune time to issue the secured bonds, and for retail investors to consider rebalancing their portfolios to get exposure to publicly tradable fixed-rate debt instruments.”