Durrant Pate/Contributor

The retail arm of regional distribution giant, Massy Holdings has secured a US$150 million long-term financing package from the Inter-American Investment Corporation (IDB Invest).

The unsecured financing package for Massy Integrated Retail Limited has already been approved by its parent company.

It is structured as a draw-down-based facility, comprising US$90 million in term financing with a 10-year tenor, a 36-month grace period and interest at a secured overnight financing rate (SOFR) plus 165 base points or an equivalent fixed rate at the time of investment.

SOFR is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. The financing package also includes US$60 million in revolving supply chain financing with an initial five-year availability at interest of SOFR plus 110 base points, structured in two tranches.

The first is a US$35-million committed import finance loan and the second, a US$25-million uncommitted facility for import finance and accounts payable. This financing from IDB Invest will enhance Massy’s balance sheet flexibility and is accretive to shareholder value by shifting a large portion of the group’s USD borrowings from secured to unsecured, unencumbering approximately US$50 million in assets.

The financing package also provides long-term capital to support infrastructure and capital investments in line with the Group’s strategic investment growth plans. Having been finalised last week, the drawdown of proceeds is expected to take place in the coming days.

Massy Stores operates 57 retail locations in five markets in the Caribbean including Jamaica, with several formats including supercentres, supermarkets, pharmacies, express, gourmet and home supply outlets.