10 months ago
48
The Jamaican government will receive US$480 million following the placement of a bond that will allow the state to focus on infrastructure projects.
It’s the Government of Jamaica’s “first structured securitisation transaction in international capital markets,” a release from the Ministry of Finance said.
The bond was upsized from US$440 million. It spans 12 years and will pay interest of 6.75 per cent.
“The GOJ looks forward to now being able to accelerate critical investments in domestic infrastructure, while at the same time reducing the national debt burden, even in the context of the adverse travel advisory and hurricane induced growth shock and the anticipated flat growth this year, for the benefit of all Jamaicans,” said the Finance Ministry.
The bond was floated on the international markets and issued through a Cayman Islands-registered special vehicle called Kingston Airport Revenue Finance Limited, otherwise called KingAir.
“The notes do not represent debt obligations of the Government of Jamaica or any of its agencies. Kingston Airport Revenue Finance Limited will also annually distribute to the Government of Jamaica any surplus it achieves above established benchmarks,” the release stated.
The transaction involved the securitisation of the portion of the Norman Manley International Airport revenue that is due to the Jamaican government. Securitisation of the NMIA revenue was achieved through the bond issue by KingAir.
Government has granted KingAir its rights to 52.33 per cent of the revenue generated by the Norman Manley International Airport, in exchange for the US$480 million that was raised through the bond issue.
The proceeds of the KingAir bond equate to about $76 billion in local currency.
The Jamaican Government will receive a one-time payment equivalent to the take-up of the bond, less transactions costs.
The bond received a BB rating from Standard & Poor’s Global Ratings and Ba1 from Moody’s.
English (US) ·