Gov’t Secures US$480M in First Structured Securitisation Transaction

Jamaica’s first structured securitisation transaction in international capital markets has earned the government almost US $500 million.

The Ministry of Finance made the announcement on Monday.

The transaction involved the securitisation of the portion of the Norman Manley International Airport, NMIA, revenue that is due to the government.

Nora Gaye-Banton reports.

The Ministry of Finance says the securitisation of the Norman Manley International Airport, NMIA, revenue was achieved through the issue of a US $480 million, 12-year bond by Kingston Airport Revenue Finance Ltd.

The ministry says Kingston Airport Revenue Finance, also referred to as King-Air, is a special purpose vehicle held in trust in the Cayman Islands, whose actions are limited to the terms of its debt, and which dissolves after it repays its debt.

According to the finance ministry, the government grants King-Air its rights to 52.33% of the revenue generated by NMIA in exchange for the US $480 million that was raised through the bond issue. It referred to this arrangement as KingAir RevShare.

Outgoing finance minister, Dr. Nigel Clarke, says the bond was over-subscribed.

Additionally, the notes are the sole obligation of the issuer, Kingston Airport Revenue Finance Limited.

Dr. Clarke says the success of this bond demonstrates investors appetite for Jamaican assets.