Mayberry fund to raise $3.3b bond

Mayberry Jamaican Equities Limited, MJE, plans to raise up to $3.3 billion in a bond offer that closes next month.

The coupon rates are slightly lower than the large bond raised by its parent a year earlier.

The company said it intends to use the proceeds “to repay existing indebtedness and to expand its investments securities portfolio”.

The offer opens April 22 and closes May 13.

The liabilities at MJE total $7.2 billion up to December 2023 from $4.6 billion a year earlier. MJE’s capital base continues to be strong with $17.3 billion in shareholder equity at December 2023, but that’s down from $19.8 billion a year earlier. The reduction was due to a fall in certain stock market values due to wider market challenges. MJE is a listed fund comprising of local stocks which are pooled together. Consequently, stock price fluctuation affects its overall valuation.

The new bond would be issued in three tranches totalling $2.25 billion with the ability to upsize to $3.37 billion. Tranche 1 will allow up to $750 million at 9.25 per cent and matures in 13 months, tranche 2 up to $750 million at 10 per cent and matures in 26 months, and tranche 3 up to $750 million at 10.5 per cent which matures in 36 months.

Regarding the coupon, Mayberry Group CEO Gary Peart said that the bond was being issued out of St Lucia and, as such, while “the nominal interest rate is lower, the effective interest rate is higher when adjusted for withholding tax”.

Mayberry plans to list the secured bonds on the JSE Bond Market on the Jamaica Stock Exchange.

MJE’s parent company raised some $6.5 billion in a bond in early 2023, after upsizing it from $5 billion. The funds were raised in four tranches with the interest offered on par with the new MJE bond at the lower maturities including tranche 1 which offered 9.25 per cent over 18 months. The new MJE bond however offers slightly lower rates for the longer tenure than the Mayberry bond which offered 11 per cent interest for 24 months and 12 per cent interest for 36 months.

steven.jackson@gleanerjm.com