JMMB set to raise another J$2 billion through preference market
Published:Friday | December 17, 2010 | 12:00 AM
Jamaica Money Market Brokers (JMMB) will be going to the market in January with a new preference share offer, structured in two parts to raise a combined J$2.1 billion.
The new offer replaces two preference stock issued by the company some three years ago, totalling 854.542 million units valued at J$2.5 billion, which were redeemed in full this month. A third tranche of 47.328 million units matures February 2012.
The first of the new issues, structured, JMMB said, to reward client loyalty, is targeting J$1.2b of new capital; the second, J$875m.
"The expected yield from this offer will enable us to continue diversifi-cation of our business lines, both locally and regionally, expansion into new markets and explore acquisition opportunities in Jamaica and overseas," said Keith Duncan, chief executive officer.
In tranche one, the offer includes 400 million 8.75% cumulative redeemable prefs with no par value, priced at $3 per share and exclusive to JMMB clients. Dividend will be paid monthly to maturity in 2016.
A second tranche of 250 million, with a coupon of 8.5%, will be offered at $3.50 per share to the general public. Dividend is also payable monthly to 2016.
Minimum purchase is set at 10,000 units for each offer, both of which open for subscription on January 3 to close four days later.
These initiatives are expected to improve the company's profitability by 15 per cent over the next three years, the company predicts.
At year end March 2010, JMMB reported net profit of J$986 million, a 10 per cent drop from the previous year when it recorded approximately J$1.1 billion.
The company intends to build-out its credit and pension business, two areas which Duncan said will be important income streams going forward.
Regionally, the company is also looking to deepen its operation in the Dominican Republic, where it already operates a brokerage house, JMMB BDI America, and recently acquired a savings and loans institution.
With an investment outlay of US$1 million, the company also intends to open a second JMMB BDI branch in Santiago; and is exploring re-entering the securities market in Trinidad, where it is exploring for potential acquisition targets, Duncan said.
JMMB exited the Trinidad market in 2008, selling its 45 per cent stake in Caribbean Money Market Brokers to majority partner CL Financial for US$41.37 million, or J$3 billion.