NCB Financial prices US$225m offer at 11%
Published:Wednesday | July 30, 2025 | 12:05 AM
NCB Financial Group Limited, operator of Jamaica’s largest commercial bank, has received a ‘B’ rating for its pending US$225 million debt issue on the international capital markets, the proceeds of which will primarily refinance existing borrowings.
The interest rate at 11 per cent hovers at the higher end of its existing borrowing costs but reflects current market conditions.
In a release on Friday, NCB Financial said the offer for the senior secured notes would close expected by July 31. Fitch Ratings has assigned a long-term expected rating of ‘B+ (EXP)’ and a recovery rating of ‘RR4’ to the proposed notes.
“The net proceeds will be used to redeem part of its existing indebtedness and for general corporate purposes,” said Fitch, adding that the final rating is contingent upon the receipt of final confirmation documents.
The issuance replaces a previously rated senior unsecured offering, withdrawn by Fitch in June following changes to the debt structure “from senior unsecured” to “secured”, Fitch noted.
The new secured notes will rank ahead of subordinated and unsecured debt, backed by pledged assets. However, they will be junior to other obligations secured by different collateral. Despite this, Fitch believes the recovery prospects remain average, justifying the ‘RR4’ rating – meaning investors might recover 31 to 50 per cent in the event of default.
NCB Financial’s ratings are tied to its main subsidiary, National Commercial Bank Jamaica Limited. The holding company earns most of its income through dividends at 65 per cent, management fees at 24 per cent, and interest at 11 per cent.
The group held $2.3 trillion in assets and $210 billion in capital, according to its 2024 annual report. Its borrowing through corporate notes totalled $154 billion. These notes bear interest ranging from 6.75 per cent to 12.5 per cent, as disclosed in the annual report.
The market notice on Friday did not state the borrowing targeted for refinancing, but the financial conglomerate’s near-term maturities include US$84.4 million in intercompany loans from NCB Global Holdings at 7.35 per cent to 9.12 per cent, due in 2025.