ISP Finance Services Limited is seeking to raise J$570 million by issuing a fixed and variable rate senior secured investment bond to investors.

According to the indicative term sheet, the offer commenced on September 28 and will be distributed to accredited and minimum purchase investors as an exempt distribution in accordance with the Financial Services Commission’s (FSC) rules. The interest rate is fixed at 11.50 per cent per annum for the first year and a variable rate of six-month weighted average treasury bill plus a spread of 3.50 per cent. In addition, there is an interest rate floor of 11.00 per cent throughout the life of the bond. The lead broker and arranger, Sterling Asset Management, defines the minimum investment as J$10 million according to the indicative term sheet.

ISP Finance Services Limited was established as a private corporation on January 3, 2007. The company’s managing director and CEO, Dennis Smith, explained: “As the business expanded, we provided additional capital over time, mainly in the form of loans. In an initial public offering in March 2016, the company was listed on the Junior Market of the Jamaica Stock Exchange. The number of shares that are now issued and authorised is 105,000,000.”

The company’s main operation is short-term lending, such as microfinance lending for small business loans, education loans, home improvements, debt consolidation, payday advances, and auto insurance or repairs. 

Smith commented: “Our goal is to become a major player in the microfinance sector, serving the needs of small business enterprises while being the market leader for unsecured loans to public and private sector employees. The company’s key motivation for the bond is for the net proceeds to be used to refinance debt and for the expansion of its loan book.”

The Jamaica Association of Micro Financing (JAMFIN), which represents microfinance institutions, counts the company as a member. As of June 30, 2022, the company’s net loan portfolio was J$681,296,099 in value.