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JDX gets big support

Published:Tuesday | January 26, 2010 | 12:00 AM

Jamaica's largest insurance company and two biggest banking groups have confirmed their full participation in the $700- billion Jamaica Debt Exchange programme (JDX), despite the expected decline in interest income on investment portfolios.

Sagicor Life Jamaica now says its board approved the take-up of the new bond issues on January 13, a day before government launched the JDX, and five days before the offer was opened for subscriptions.

Scotia Group Jamaica said, in a statement released to the press Monday, that its projected impact on equity would be less than one per cent - which amounts to $470 million or less - and that its capital adequacy ratios would be maintained well above regulatory levels.

The banking group has a capital base of $47.9 billion.

Its wealth management arm, Scotia DBG Investments, valued the impact on its equity holdings at $94 million or 1.15 per cent of its $8-billion capital base.

National Commercial Bank (NCB) announced its participation in a release last Thursday, while Jamaica Money Market Brokers had gone public with its full support at the launch of the JDX on January 14.

Other smaller financial institutions also signalled they will participate.

Last Wednesday, Finance Minister Audley Shaw said he expected, based on feedback from the financial houses, no less than 95 per cent take-up of the offer.

The Government needs at least 90 per cent participation in the 24-bond issue. The JDX replaces 350 notes at various coupon rates, averaging 12.25 per cent.

It is expected to save the Government $40 billion per year on its domestic debt-servicing costs.