National Commer-cial Bank Jamaica, NCBJ, plans to raise US$300 million in new debt on the international market, to be secured by future receipts from two international card companies.
“The transaction contemplates current and future receivables due from Visa and MasterCard for international US dollar-denominated merchant vouchers acquired in Jamaica. These amounts are not the same as credit card receivables due from customers of NCBJ,” the bank told the Financial Gleaner.
NCBJ has utilised the funding structure for many years, raising US$250 million in 2015 and another US$150 million in 2016 via this route. Both issues are being serviced at interest rates below six per cent.
As of its last financial year ending September 2021, the bank owed principal debt classified under ‘merchant voucher receivables’ of US$182.3 million, down from US$254.2 million the previous year, according disclosures by parent company NCB Financial Group.
The new US$300-million transaction is being arranged by Greyfell Capital Management LLC, and is expected to close by September 30. The proposed notes are structured for NCBJ to pay interest only for the first 3.25 years, with the first principal payment due in April 2026.