Bonds listed on the JSE bond market

Durrant Pate/Contributor

Fast-rising Jamaica-based regional micro financing company, Dolla Financial Services has successfully raised over J$1 billion in additional capital on the Jamaican bond market for its continued expansion.

After listing its equities on the Jamaica Stock Exchange (JSE) Junior Market six months ago, Dolla has returned to the local capital market and successfully raised more funds through this latest bond offer.

The bonds have formally been listed on the JSE bond market

They are two tranches of Variable Rate Secured Corporate Bonds, which were offered by way of Exempt Distribution:

(a) Tranche 1- J$500,000,000 10.50 per cent Variable Secured 3-Year Corporate Bond

(b) Tranche 2- J$500,000,000 11.75 per cent Variable Secured 5-Year Corporate Bond

Details of the two bond tranches

Tranches 1 and 2 were upsized by J$72.178 million and J$99 million respectively. The 10.5 per cent has a market capital of J$572.12 million and the 11.5 per cent Variable Secured bond with a market capital of J$599 million. Dolla raised, in total, J$1.17 billion, the largest amount from a company approved to list on the JSE Private Market.

The number of companies listed on the Private Market will increase to six and the number of securities listed on the Private Market will increase to 12. The overall number of securities now listed on the JSE will increase to 150.

JSE Managing Director Marlene Street Forrest commented that “it is indeed special to list companies on the Junior Market which provides the basis for growth of our business sector, especially in these times of uncertainty. It is even more special to see that these companies take advantage of the Capital Market for the raising of capital and funding their various projects”.

She added:  “In this there is a message that the market is aligned where there is confidence from investors that these companies will deliver and from companies that they intend to deliver. We know that the listing on the Stock Market advances that message and makes it easier for investors to invest in these offers whether it is on the Equities Market or the Bond Market, whether private or public.”

Market still positively responding to new companies

According to Street Forrest, “at this time, where there is economic uncertainty, we have seen where the market is still positively responding to new companies that are offering their securities to the market or companies that have already listed on the market”.

She said: “I am using this forum to encourage other companies seeking to raise capital for growth and development to take advantage of the market confidence.”

Street Forrest is encouraging other companies like Dolla to take advantage and utilise the several options available to list on the JSE, saying: “This will certainly play a pivotal role in not only Jamaica’s economic recovery from COVID-19 but a protection against the geopolitical upheavals which are certain to impact our economy. The headwinds are here.”

Dolla’s CEO, Kadeen Mairs, speaking at the recent listing ceremony, told the audience: “Our balance sheet was healthy, so we said to Victoria Mutual Wealth Management, ‘We want to raise J$1 billion’. As our financial advisors, they undoubtedly reminded us of the current financial climate and how tough that would be. We opened the bond on September 1, 2022, and exercised the right to upsize on October 5 and closed on October 18, after we successfully raised J$1.17 billion. Now Dolla has the money to expand to The Bahamas, and to the Eastern Caribbean. We have been capitalised to fund Ultra Financier Limited, our asset-based lender, and are still able to reserve capital for acquisition opportunities.”

Dwight Jackson, assistant vice president for capital market at VM Wealth Management, stated: “Dolla is going places and, based on their expansion plan, they will be back at the JSE to raise more capital. The y are a young company with great ambition, and it will not surprise me that sometime next year they will be listed on the Main Market. I am saying to the media, use Dolla as a case study to encourage other companies to use the stock market to raise funds to expand their business.”