3 weeks ago
9
Barita Investments Limited is raising debt on the market through bond offerings that could claw as much as $6 billion from investors, assuming the company exercises the option to upsize the offer and the instruments are fully subscribed.
Chairman of Barita, Mark Myers, says the bond proceeds will fund investment opportunities in and outside of Jamaica.
The investment company is seeking $2.25 billion from a Jamaican dollar bond and US$11 million from another priced in American currency. The offer, being done through the bond market of the Jamaica Stock Exchange, runs for two months, from March 28 to May 26.
Depending on market demand, Barita may upsize the offering by $1.25 billion and US$6 million, respectively.
The upsized offer would equate to $3.5 billion and US$17 million, respectively, which amounts to around $6 billion.
The bonds have seven tranches with interest rates ranging from 7.0 per cent to 10.9 per cent per annum, and maturity periods ranging from two to 10 years. The highest rates are offered for investments in Jamaican dollars.
The bond will provide cash to the company and fund its expansion. The proceeds will refinance $84.15 million in existing debt; $643.2 million and US$3.4 million of the upsized funds will be utilised for fund asset acquisitions; while up to $1.3 billion and US$6.8 million will support securities trading and investment banking deals.
Barita’s debt was just under half of its $35.3 billion in capital in the December quarter, but the new bonds could push the ratio closer to two-thirds, but still within an acceptable range.
Barita’s latest quarterly financial results highlight profits amid a challenging economic environment. For the first quarter ending December, company made net profit of $552 million, compared to $479.3 million in the prior year. Revenue for the quarter rose to $1.4 billion, up from $1.3 billion.
The new bonds, which will rank equally with Barita’s other unsecured debts, will be listed on the JSE bond market.
English (US) ·