Capital Markets

Capital market developments

Access paying 16% for $102.5m | Access Financial, a junior listed company on the Jamaica Stock Exchange, is seeking to raise up to $102.5 million and will pay 9% per annum by way of unsecured notes due November 2014 to do so. The notes are priced at 97.99649% of the face value to yield 11 percent to maturity in November 2014, but the cost to the company is closer to 16 percent when all the cost of raising the funds, interest and the discount are taken into account.

The Invitation opens on Tuesday, 8th October 2013 and closes on Tuesday, 15th October 2013 subject to the right of the Company to shorten or extend the time for closing of the subscription list in the circumstances specified in this Prospectus.

Access has been very profitable and will use to funds for working capital. Earnings for the six months to June, rose 34 percent to $119.59 million from $89. 38 million in the same period last year. Revenues, which was up by 13 percent in the first quarter, is up 18 percent in the second quarter over 2012 and up 16 percent year to date.

The results are coming off of a successful 2012 when it clocked up earnings of $238 million from an increase of 47 percent from revenues of $661 million.

Access Financial is an IC Insider Buy Rated stock.

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Jamaican Teas looking $200m | Junior market listed Jamaican Teas (JTL) is offering fixed and floating rate senior secured corporate notes due 2017 to raise up to $200 million at an initial rate of 8.5% for two years and variable thereafter until maturity. The note will be secured by way of a debenture creating a fixed and floating charge over the assets of JTL, subject only to existing registered security interests. JTL has applied to the Jamaica Stock Exchange for the notes to be listed for trading.

The offer officially opens on October 17 and is scheduled to close on November 7. The floating rate for each interest period shall be determined on each interest setting date, commencing on the first interest setting date and shall be equivalent to the 180 day WATBY plus a margin of 2.50%. Interest will accrue from the issue date and will be payable on the 30th day of each month until maturity on November 06, 2017.

JTL has the right to redeem the note after the expiration of two (2) years for the full principal value together with any accrued and unpaid interest thereon without penalty subject to 90 days written notice to note holders.

The company generated revenues, which climbed from $582 million in 2012 to $783 million in 2013 and should exceed a billion for the first time based on the year to June performance.

The company generated profit of $75 million for the nine months to June 2013 versus $65 million the similar period of the prior year, an increase of 16.2% and $24 million in the June quarter versus $22 million in the comparative period in 2012, an increase of 9.5%.

Capital market is alive!

September 10, 2013 by IC Insider.com

Information gleaned by IC Insider has revealed that the capital market has been very active in Jamaica, despite the challenging economy.

Mystic Mountain, the visitor attraction located in Ocho Rios, offered $500 million of 10.50 percent preference shares in a private placement in July. The company intends to apply to the Jamaica Stock Exchange for the listing of all of the Preference Shares by way of introduction and such application will be made after the lapse of six months following the closing of the Offer. NCB Capital Markets were the brokers for the issue.

The original offer was for up to One Hundred Million ($100,000,000) at 9.75% 5 year Cumulative Redeemable Preference Shares at a price of Five Dollars in Jamaican currency (J$5.00) per share with an option to extend for a further two (2) years with interest rate of 10% in year six and 10.50% in year seven. This was later upped to $500 million at 10.50 percent for all years.

CAC2000 Ltd, an engineering company specializing in applied air conditioning systems, is said to have been in the market to raise $100 million in preference shares as well. Details of the offer and the terms are not yet known to IC Insider.

Facey Commodity, a subsidiary of the Mussons Group of Companies, has raised US$2 million at 9 percent commercial paper with a duration for just over a year. This is the third trange within a six week period. The instrument has option that investors can opt to get back 90 percent of the principal after six months by giving 30 days’ notice. Interest is payable monthly. Mayberry Invesrments is the broker handling the paper.

Jamaica Money Market Brokers (JMMB) went to the market to raise $750 million between 7.25-7.50 percent but collected $1.44 billion as JMMB clients gave the issues a ringing endorsement by pumping in $1.4 billion of the amount, while the general public offered to purchase only $39 million. The issue will be listed on the Jamaica Stock Exchange. What has been overlooked by investors in this issue is that JMMB presently has preference shares on the market with yields of 8.50 and 8.75 percent, which is a far better deal. Similarly is the Proven Investments instrument at 8 percent, also listed on the Jamaica Stock Exchange.

Jamaican Teas is another company in the process of tapping the market for a bond issue to raise funds.

Related posts | JMMB share offer taken up | JMMB to raise $750M