Jamaica to float new global bond
Published:Friday | January 28, 2011 | 12:00 AM
The Government of Jamaica will be going to the international capital market to finance repayment of a US$400 million eurobond, which matures in May.
But Pamela McLaren, senior director at the Debt Management Unit, Ministry of Finance and the Public Service, who confirmed the pending float of new debt, said she would not disclose any of the terms, nor the timing.
"You will appreciate that I would not want to compromise my position by disclosing my financing strategy at this time," McLaren said via email to the Financial Gleaner.
"That said, the GOJ plans to access the international capital markets to refinance the maturity due in May 2011. The Debt Management Unit is constantly monitoring the markets, and when it is deemed the opportune time the markets will be tapped for the required financing."
Finance Minister Audley Shaw last week indicated to Jamaican investors that he would be pushing for single-digit rates. Last summer at a World Bank conference in Miami, he announced that Jamaica's return to the commercial debt market was pending and made it clear the price at which he plans to buy the credit.
"When we get back into the international capital markets, we expect to raise funds at no more than 7-8 per cent," he said at the September forum to assess Latin America's commodities markets.
"I am sending that signal," he said.
The bond being refinanced was issued in May 2001 at a coupon of 11.75 per cent.
"We not going back there, we are going into single-digit rates," Shaw said, at last week's Mayberry Investors' Forum in Kingston.
"The present coupon rate of that group is one of the legacies that I am changing," he said.
Shaw also said that with Jamaica's foreign reserves now at US$2.9 billion, financing would not be hard to come by.
"Clearly, with record gross reserves at the Bank of Jamaica, we won't have a problem to make that payment when the time comes," he said.
McLaren said she was "pretty confident" of securing the required financing to redeem the global bond.
Another seven-year US$200-million eurobond that was issued at 11 per cent, matures in 2012.
Jamaica's external debt now stands at US$8.3 billion, 45 per cent or US$3.8b of which is held by bondholders, while 49 per cent or US$4.1b is borrowings from multilateral and bilateral sources.
Jamaica's national debt hit J$1.5 trillion in December.