Jamaican Government raises $4b from bond issue

The Government raised just over $4.1 billion from new subscriptions to a variable rate bond, initially issued a year ago, when it went to the market between February 8 and 10.



The bond is set to mature in 2017 and will pay interest four times each year on February 24, May 24, August 24 and November 24.



The instrument currently yields 7.595 per cent.



However, the interest rate is to be reset to 7.585 per cent on February 24, 201, representing 1.375 percentage points above the three months treasury bill rate. The applicable treasury bill rate is 6.21 per cent.



In January, the Government went to the market with three bonds – two variable rates and a fixed rate bond and raised a total of $5.27 billion.



One of those, a short-term variable rate bond set to mature in 2013, marginally underperformed the long-term bond 2020 investment instrument, raising $2.36 billion. The Government raised $2.85 billion from the longer-term bond. Both bonds are paying interest of 7.22 per cent.



The other was a fixed rate 2014 bond which was virtually ignored, raising only $54.2 million. The yield on this instrument is 6.95 per cent.



marcella.scarlett@gleanerjm.com