GOJ TAPS MARKET FOR US$1B

The Government of Jamaica (GOJ) has gone to the international capital markets to raise a US$1 billion ($157.62 billion) unsecured bond to support its liability management strategy and budgetary objectives. The prospectus was published on Wednesday through the United States Securities and Exchange Commission (SEC), three weeks after GOJ filed its registration statement to issue debt securities. According to a roadshow document seen by the Jamaica Observer, US$600 million is to be used to fund a tender/exchange offer, with the balance earmarked for general budgetary purposes.

A source close to the matter also indicated that the new bond is expected to mature in 2037. At the same time, GOJ launched the tender/exchange offer for holders of the three existing global bonds, tying the new borrowing directly to its wider effort to manage the country’s external debt. “The Invitation is part of a broader program of Jamaica to proactively manage its external public debt,” stated the tender invitation to holders of the old bonds/notes.

The Government of Jamaica is raising a US$1-billion bond on the international capital markets. (Photo: Naphtali Junior) The Government currently has US$837.53 million outstanding on its April 2028 notes, which carry a 6.75 per cent interest rate. The 2036 and 2039 notes have US$250 million and US$1.24 billion outstanding, respectively.

International Financing Review (ifre.com) reported that GOJ began holding fixed-income investor meetings on September 3, likely in connection with the new bond issuance, which will be listed on the Euro MTF Market of the Luxembourg Stock Exchange. are serving as deal managers and joint lead underwriters for the transaction. If the value of bonds tendered exceeds GOJ’s maximum purchase amount, the government can determine how much of each series it will accept, applying different proration factors where necessary.

This means it could accept less than the full amount tendered by holders of any of the eligible notes. The new tender offer opened on September 2 and will expire on September 9, unless extended or terminated at GOJ’s discretion. Settlement is expected to be completed by September 17.

“The invitation is not conditioned upon any minimum participation of any series of Old Notes but is conditioned on, among other things, the pricing and closi…