The Jamaican government has successfully secured US$480 million through its first structured securitization transaction in the international capital markets.

This initiative will involve the securitisation of a portion of the revenue generated by the Norman Manley International Airport (NMIA) that is due to the government.

The announcement was made by the Finance Ministry on Monday, October 7.

According to the ministry, the securitisation was achieved through the issuance of a US$480 million, 12-year bond by Kingston Airport Revenue Finance Ltd (the “Issuer”). This special purpose vehicle, held in trust in the Cayman Islands, is limited to the terms of its debt and will dissolve upon repayment.

“The GOJ granted Kingston Airport Revenue Finance Ltd. rights to 52.33 per cent of the revenue generated by NMIA (the “KingAir RevShare”) in exchange for the US$480 million raised through the bond issue,” the ministry stated.

The bond issuance was highly successful, attracting applications totaling US$2.3 billion, representing an oversubscription of over five times the US$440 million initially sought. As a result, the offer was upsized to US$480 million in response to robust demand.

“The notes will bear a fixed coupon of 6.75 per cent for 12 years and are rated BB and Ba1 by Standard & Poor’s Global Ratings and Moody’s Rating Agency, respectively, one notch above each agency’s sovereign rating for Jamaica. Additionally, the notes are the sole obligation of the issuer, Kingston Airport Revenue Finance Ltd., and there is no recourse to the Government of Jamaica,” the finance minister added.

This means the notes will not represent debt obligations of the GOJ or any of its agencies. Kingston Airport Revenue Finance Ltd. will also distribute any surplus above established benchmarks to the GOJ annually. Once the bond is repaid, the full amount of the KingAir RevShare will revert to the government.

The Government of Jamaica expressed satisfaction with the investor community’s interest in Jamaican assets and looks forward to accelerating critical investments in domestic infrastructure while reducing the national debt burden. This is particularly significant given the adverse travel advisories and hurricane-induced growth challenges expected this year, all aimed at benefiting the Jamaican populace.