JMMB Group seeks another preference share extension

JMMB Group Restricted (JMMBGL) will method choice shareholders throughout the coming weeks to hunt a six-year extension on two courses of choice shares that are set to mature subsequent month.

JMMBGL revealed a discover on Monday that it might be searching for to increase the tenure of JMMBGL7.25C and JMMBGL5.75C by an additional 72 months, or six years, whereas it might be redeeming JMMBGL7.00NC and JMMBGL5.50NC on March 6. The small print such because the date, location, and time for the 2 common conferences shall be communicated in brief order. The proposed extension emanates from a board resolution on January 30.

JMMBGL initially raised $9.28 billion ($9.13 billion internet as per 2018 audited financials) in March 2018 by issuing 4 tranches of choice shares. JMMBGL7.25C had a carrying worth of $3.697 billion; JMMBGL5.75C had a carrying worth of US$42.53 million ($5.33 billion); JMMBGL7.00NC had a carrying worth of $64.35 million; and JMMBGL5.50NC had a carrying worth of US$310,000 ($38.85 million). The Jamaican-dollar (JMD) choice shares have been issued at $2 per share whereas the United States-dollar (USD) choice shares have been issued at US$2 per share.

On the finish of March 2024, JMMBGL5.75C had a carrying worth of $6.55 billion whereas JMMBGL5.50NC had a carrying worth of $47.71 million, which is because of the depreciation of the JMD in opposition to the USD.

JMMB Group is proposing to vary the mounted rate of interest supplied on JMMBGL5.75C from 5.75 per cent each year to 7.50 per cent each year, a 175-basis level (1.75 per cent) enhance. With respect to JMMBGL7.25C, JMMB Group desires to set a hard and fast fee of 10.00 per cent between March 2025 – March 2026 earlier than the choice share turns into a variable fee instrument once more. The choice share would reset each March 6 with a brand new reset fee, which might be calculated as 250 foundation factors (2.50 per cent) plus the GOJ’s (Authorities of Jamaica) 180-day weighted common treasury invoice yield (WATBY), topic to a flooring of 6.00 per cent, which signifies that the reset fee can by no means go beneath that fee.

The proposed extension would end in JMMB Group paying an additional US$744,275 ($116.87 million) in choice share dividends to the house owners of JMMBGL5.75C. JMMB Group’s 7.25 per cent choice share had a 3.46 per cent fee in 2021, 5.62 per cent fee in 2022, 9.94 per cent fee in 2023, and 9.61 per cent fee in 2024. That is based mostly on a formulation of the GOJ 180-day WATBY plus 150 foundation factors (1.50 per cent).

The primary 12 months below the mounted 10 per cent rate of interest would end in choice shareholders receiving an additional $14.42 million in choice share dividends. Afterwards, the anticipated discount within the GOJ Treasury Invoice yields would end in JMMB Group paying much less in choice share dividends on JMMBGL7.25C. JMMBGL choice shares denominated in JMD have their choice dividends paid month-to-month whereas the USD choice shares pay choice dividends quarterly. The choice dividends are tax-deductible for JMMB Group, which implies there isn’t a withholding tax utilized on cost to house owners of the shares.

JMMBGL7.00NC closed Monday at $2.30, which is a premium to its maturity worth. JMMBGL7.25C closed at $1.82; JMMBGL5.50NC closed at US$1.7424; and JMMBGL5.75C closed at US$1.85. These three choice shares are all buying and selling beneath their maturity worth. February 20 is the document date for all 4 of those choice shares which have a cost date of March 6. JMMB Group will publish its third-quarter outcomes by February 14.

This could be the second choice share extension JMMB Group would execute in over a 12 months. JMMB Group approached choice shareholders to get an extension on the maturity date on all 4 of its choice shares by six years on the time. Nonetheless, on the December 2023 common assembly, two of the choice shares — JMMBGLUSD5.75 and JMMBGL7.25 — didn’t have a quorum for a gathering to be held. Because of this, these choice shares matured in January 2024 with JMMB Group paying out about $62.33 million.

JMMB Group was in a position to lengthen the maturity dates of the opposite two choice shares to January 2030, with JMMBGLUSD6.00 being adjusted from 6.00 per cent to eight.50 per cent whereas JMMBGL7.50 grew to become JMMBGL9.50. The phrases on JMMBGL9.50 was that it might be mounted at 9.50 per cent from January 2024 – January 2025 earlier than it started to drift once more with a reset fee. That reset fee is identical because the proposed phrases for JMMBGL7.25C. JMMBGL9.50’s fee ought to be reset to eight.56 per cent, based mostly on the latest GOJ Treasury Invoice outcomes. The 6.00 per cent flooring was said to make sure that the choice share didn’t go beneath Financial institution of Jamaica’s (BOJ) higher vary for its inflation goal.

Eppley Restricted’s choice share matured on December 6, with the corporate paying out $500 million. Sygnus Credit score Investments Restricted has two choice shares maturing in December, with the category C choice share maturing at $100 with a $1.6-billion face worth whereas the category D choice share matures at US$10 with a US$16.78-million face worth.