JMMB to raise $6b from new preference offers
Published:Friday | February 12, 2021 | 12:31 AM
J MMB Group Limited is seeking $6 billion from the market through the issue of new preference stock at fixed rates of 7.15 per cent and 7.35 per cent.
The offer of the two prefs, which runs from February 16 to March 9, is priced at $3 per share. Of the two billion units available for subscription, JMMB has set aside 1.5 billion for its clients.
The prefs will pay monthly dividend, starting April 19, 2021, until maturity in seven years.
The financial conglomerate, which has been using preference shares as a financing vehicle over the years, said the net proceeds from the offer will provide the group with greater financial flexibility to execute its regional growth strategy, which includes organic expansion and diversification, and expansion of its businesses lines through investment in other entities, whether by acquisitions or strategic investments.
“Consistent with previous offers for preference shares, the proceeds of which have helped to fuel the group’s growth in profits over the years, funds raised will eventually be invested in various business lines and specific projects to drive profit growth,” JMMB said in its prospectus.
The financial conglomerate, whose holdings span investments, banking and insurance in three regional markets, currently has about 10 preference stocks listed on the Jamaica Stock Exchange, in JMD and USD currencies, with coupon rates ranging up to 7.5 per cent. The new issues will be denominated in Jamaican dollars.
Among the group’s borrowings, nearly $18 billion relates to its redeemable prefs.
Additional information requested by the Financial Gleaner on the areas JMMB is targeting for expansion and diversification was not forthcoming up to press time.
In pointing to specific areas of growth over the years, JMMB Group, a money market pioneer, highlighted the expansion of business lines within the Dominican Republic; the near-decade-old acquisition of the Capital & Credit Financial Group in Jamaica, in 2012, which it said facilitated their eventual transition to commercial banking services in the form of JMMB Bank (Jamaica) Limited; acquiring full control of JMMB Bank (T&T) Limited; and the launch of JMMB Investments (Trinidad and Tobago) Limited and JMMB Express Finance.
JMMB Group posted profit of $2.4 billion over six months ending September 2020 on revenue of $10.8 billion, reflecting an 8 per cent decline in earnings when compared to the prior period, largely as a result of the COVID-19 pandemic.
The company also saw an erosion of value in its investment portfolio, but gains in loans and cash holdings acted as offsets, growing the group’s total assets to nearly $467 billion.