More than one month has elapsed since the June 4 announcement by NCB Financial Group (NCBFG) that it intended to raise US$300 million bond, but there has been near silence on the state of the international capital markets offer.
The senior unsecured notes received an expected credit rating of B+ from Fitch Ratings and a B– credit rating from S&P Global Ratings. NCBFG’s initial disclosure indicated that the offer was subject to terms it found acceptable, including pricing. The pricing exercise was expected to take place on June 11, and close shortly thereafter. Pricing would let investors know the interest rate and yield on the instrument.
On Thusday, an executive of NCBFG told Sunday Business Guardian, “Regarding your request for an update on our announced potential transaction to issue debt in the international capital markets, we confirm that the transaction is still being pursued.
“We are not able at this time to answer most specific queries about it as we seek to comply with all applicable requirements. We had initially indicated an expected date of pricing, but that was only an expectation. When pricing occurs, announcements will be made as usually expected and required.”
Fitch Ratings shows no update on this instrument and no new NCBFG instrument has been seen on cbonds.com.
The bond was meant to refinance US$269 million in maturing debt due in 2025 and US$21 million of NCBFG’s 2026 debt. NCBFG has US$209 million of debt maturing in 2026 and US$108 million of debt maturing in 2027. A road show document revealed that the US$300 million bond would mature in 2030 under a pro forma debt amortisation profile.
On June 5, NCBFG launched a tender offer for its US$64.96 million bond, which is set to mature in September 2025 at an 8.5 per cent interest rate. The offer was open between June 5 to 10, a day before the international bond pricing. The tender offer was effectively a debt swap whereby investors would exchange their September 2025 bond maturity for the proposed US$300 million international bond. There has been no update on this tender offer on the status either.
Despite a possible delay in the US$300 million bond, NCBFG launched a J$2.94 billion (US$18.36 million) bond to refinance debt, as well, on June 20. Tranche A of the bond will raise J$1.18 billion at an interest rate of 9.50 per cent for two years while tranche B will raise $1.77 billion at an interest rate of 9.75 per cent for three years. Tha offer was set to close on July 4.
Debt reduction move
NCBFG’s move to the international debt markets comes at a time when it is seeking to lighten its debt load. NCBFG had J$90.72 billion (US$571.64 million) in debt as of September 30, 2024, with J$45.99 billion (US$289.82 million) denominated in United States dollars (USD). Some J$62.99 billion of that debt balance was listed as current for the 2025 fiscal year.
The preliminary memorandum offer document for the US$300 million bond indicated that NCBFG is pursuing various strategic transactions to generate cash flow to reduce the group’s debt. These potential transactions could potentially raise J$24.8 billion (US$154.90 million) in aggregate cash flows. One such transaction was the sale of Thoma Exploitatie BV by Guardian Holdings Ltd (GHL) on January 24 for J$20.5 billion (US$128.05 million). NCBFG recorded an after-tax gain of J$15.1 billion (US$97 million), of which, J$9.4 billion (US$60 million) was attributable to NCBFG shareholders. GHL, which is based in Westmoorings, is a 61.77 per cent subsidiary of NCBFG.
However, NCBFG’s planned sale of a 30.20 per cent stake in Bermudan-based Clarien Group Ltd to Cornerstone Financial Holdings Ltd did not materialise as the transaction was terminated on May 8. Due to a previously agreed exit provision, NCBFG will purchase Portland Private Equity Ltd’s 17.92 per cent stake in the Clarien Group for approximately US$20 million. Michael Lee-Chin is the chairman of both NCBFG and Portland Private Equity. The other partner in Portland Private Equity is Robert Almeida, who is the CEO of NCBFG.
The memorandum also discloses that AIC Global, a company owned by Lee-Chin, received fees and expenses in excess of US$10 million for the financial year ended September 30, 2024, under a services agreement in which AIC Global “commits administrative and other support services” to NCBFG. For the six months ended March 31, 2025, AIC Global received US$6.05 million. The AIC services agreement was mutually terminated by the board of NCBFG and Lee-Chin in May 2025.
Apart from the planned debt reduction, NCFBG will be executing internal reorganisation transactions by the end of 2025 to enhance capital efficiency and operational efficiency across the group.
According to the memorandum, “As of the date of this offering memorandum, the Group continues to explore an internal reorganization, the goal of which is to eliminate redundant businesses, create centres of excellence and rationalise related activities inclusive of its pension activities within NCBFG and the Guardian Group, as well as consolidate banking activities within NCBJ.”
Financial performance
While National Commercial Bank Jamaica Ltd (NCB) represents 53 per cent of the group’s J$2.31 trillion (US$14.96 billion) in consolidated assets, the life & health insurance & pension fund management (LH&P) segment accounted for US$154.7 million or 58.5 per cent of consolidated net operating profit before deduction of unallocated corporate expenses. The LH&P segment is largely attributed to GHL, which represents the insurance arm of NCBFG.
NCBFG reported J$120 billion (US$774.9 million) in net operating income for its 2024 financial year and J$21.6 billion in net profit, J$13.34 billion (US$86.14 million) being attributable to shareholders. For the six months ended March 31, 2025, NCBFG’s net operating income increased by 20 per cent to J$42.2 billion (US$495.9 million) over the the prior six months period. Net profit improved 108 per cent to J$22.2 billion (US$142.5 million), J$13.34 billion (US$85.64 million) being attributable to shareholders.
NCBFG’s share price declined by more than 20.59 per cent on the Jamaica Stock Exchange (JSE), closing at J$40.36 on Friday. On the T&T Stock Exchange, the financial conglomerate’s share price has declined by 17.15 per cent, year to date. It closed a $1.98 on the local market on Friday.
NCBFG’s market capitalisation on Friday in Jamaica was J$104.57 billion (US$649.28 million) by market capitalisation. NCBFG is down 17.15 per on the Trinidad & Tobago Stock Exchange (TTSE) to $1.98, according to the West Indies Stockbrokers report on Friday.
Regional debt offers oversubscribed
Other regional entities and sovereign states have completed major bond offerings in the last month on the international capital markets. Trinidad Generation Unlimited, a state-owned entity, issued a US$525 million senior unsecured bond last month with a 7.75 per cent interest rate and an 8.125 per cent yield. That bond which received a BB credit rating from Fitch matures on June 16, 2033.
The Commonwealth of Bahamas issued a US$1.067 billion senior unsecured bond with an 8.25 per cent interest rate and maturity date of June 24, 2036. That offer received a BB– rating from Fitch, the same rating as National Commercial Bank Jamaica Limited (NCB), NCBFG’s wholly owned subsidiary.
Scotiabank Peru S.A.A. also completed a US$400 million bond with a 3.05 per cent interest rate and yield of 6.103 per cent. The bond matures on October 1, 2035, and received an expected credit rating of BBB from Fitch.