Sagicor Investments offering short-term financing
Published:Thursday | October 4, 2018 | 12:00 AMMcPherse Thompson
The capital markets unit of Sagicor Investments Jamaica Limited has raised and disbursed more than $1 billion in a bond offering it began in the third quarter of this year, the proceeds of which will be available to businesses for working capital, retooling and expansion.
It has also received expressions of interest from several other businesses and expects to close on more deals in the fourth quarter, according to Manager for Capital Markets, Mischa McLeod-Hines.
"We have expressions of interest from the largest companies in the Jamaican market and believe that given current market conditions that other companies should take advantage of this offer," she said.
Sagicor Investments' decision to offer short-term financing at this time is in support of those Jamaica entities that require needed capital to invest in their businesses and Jamaica's economy in general.
"We believe that market conditions currently support the issuance of such notes given the liquidity in the local market, specifically Jamaican dollars. This is due to lower demand for funding by the Jamaica government. This has enabled the expansion of private economic activity which needs additional funding," McLeod-Hines said.
As to whether there is a demand for such financing and from which sectors, the Manager said that "based on the economy, the sectors that are on a growth trajectory are manufacturing, distribution, tourism, infrastructure and finance."
She added that "Sagicor Investments is focused on those sectors and institutions that are expanding their capacity through acquisition, new machinery, new initiatives and new markets. We believe that local, regional and international expansion are driving business decision-making as evidenced by Jamaica Broilers' recent acquisition in the US" and hence the company is contented to support such initiatives.
The debt is repayable over the 13-month life of the bond.
In determining the final amount it offers to companies, "we take into consideration the use of funds and their financial statements," said McLeod-Hines.
She said "the final decision will be based on the suitability of the financing for the client and how it impacts the creditworthiness of the entity."
McLeod-Hines said Sagicor Investments is an investment banking/asset management company which has always been involved in those activities and that market condition will dictate how active it is in the various markets in which it operates.
As to whether the loans are backed by receivables, she said "we offer both secured and unsecured financing" and that "secured options can be backed by various types of collateral."
McLeod-Hines said the transactions are flexible and tailored to individual company's needs and is executed in less than 30 days through the bond offer.
The investment firm "recognises the impact on the macroeconomic growth these companies have and is, therefore, working with the entities to boost capital in their respective businesses," she said.