6 days ago
2
Microlender Dolla Financial Services Limited is raising $1 billion on the public debt market to expand its loan portfolio and refinance existing debt.
The company has the option to upsize the offer to $1.5 billion, contingent on market demand. The debt raise is being done via the Jamaica Stock Exchange, with Mayberry Investments Limited as the lead broker.
This marks Dolla’s second bond offer for this year, following a $1.65-billion raise, also facilitated by Mayberry.
“Dolla Group has determined that it needs to raise approximately $1 billion within the next 12 months to ensure it can continue growing its loan book and increasing the profitability of the business,” the company said in its prospectus.
The microlender noted that it must refinance a $574-million loan maturing in October.
The debt raise also comes amid investigations launched by the company into fraudulent activity surrounding loan disbursements.
The bond offer will open on October 23 and close on November 13. The offer comprises two tranches – $500 million at an annual interest rate of 11 per cent over three years; and $500 million at 12 per cent over five years. The minimum subscription is $20,000.
“The company will make an application to list the secured bonds,” on the JSE bond market, Chairman Walter Scott said.
Dolla is itself listed on the JSE junior market. Mayberry indirectly holds the biggest stake in the microlender through affiliates Widebase at 21 per cent and Mayberry Equities at 11.56 per cent. Dolla was co-founded by Kadeen Mairs, whose firm Dequity Capital Management owns 20 per cent.
“This year was defined by record loan portfolio expansion, a landmark bond raise, and sustained demand for our lending solutions across local and regional markets,” Scott said.
He noted that the company’s net loan portfolio grew by nearly two-thirds to $4 billion as of last December, and further to $4.5 billion by June 2025 — up from $3 billion a year earlier. Since 2018, Dolla’s loan book has grown at an average annual rate of 79 per cent, Scott said.
The bonds will be secured by a debenture creating a “fixed and floating charge over all of the assets of the company”. Dolla has also committed to three financial covenants, including a maximum leverage ratio — how much debt it has compared to its equity — of 4.5 times. Currently, the ratio is less than 2.5 times, with borrowings of $3.15 billion and capital at $1.35 billion as of June.
In the June quarter, Dolla Financial reported net profit of $132 million, down from $144 million in the prior year, due to increased provisioning for impaired loans.
Non-performing loans now account for roughly 11 per cent of the portfolio. The company has increased its provisioning, due in part to a fraudulent incident affecting “$170 million” of the company’s loan portfolio.
“The incidents were primarily linked to irregularities in loan security documentation, an issue that has recently affected several institutions within the Jamaican financial sector,” Dolla stated. This led to higher bad debt write-offs and expected credit loss provisions.
Management launched an immediate investigation and has since strengthened internal controls across loan origination and disbursement.
“Investigations into the fraudulent activities are ongoing, and the company is pursuing all available avenues to recover amounts lost,” it added. “Any recoveries achieved will directly benefit shareholders by contributing back to profits.”
English (US) ·