Durrant Pate/Contributor

In a bid to pay off J$2.28 billion in maturing bonds this week, Mayberry Investments is again tapping the Jamaican bond market with a J$2.3 billion bond offer.

The offer, which is subjected to being up-sized by an additional J$1.15 billion, opens this Friday (January 31) and closes February 28. The 24-month bonds will carry an interest rate of 10.25 per cent per annum and will be collateralized by a secured by charge over Mayberry’s secured loan book. 

The minimum offer is J$20,000 with increments in multiples of J$10,000. The secured bonds carry contractual right to quarterly interest payments. 

Mayberry indicates that this under-appreciated quality was demonstrated during the past quarter when a number of locally listed corporates chose to either reduce or omit entirely their quarterly dividends.

Interest payment and calculation

Interest will be calculated and accrued from day to day but prorated on the basis of a 360-day year and paid quarterly on each interest payment date—the first of which will be March 31, 2025. 

Interest will be due and payable on December 31, March 31, June 30, and September 30 in each year. Mayberry intends to use the proceeds to repay in full its J$2.282 billion, 11.00 per cent for secured bond January 2025 – Tranche III, aggregating to J$2.282 billion. 

The company also intends to pay the expenses associated with the invitation out of the proceeds.  Mayberry also plans to apply to the Jamaica Stock Exchange (JSE) to list the secured bonds on its bond market platform.

Opportunity for small investors 

A significant benefit of the secured bonds is the low threshold to participate, thereby providing ample opportunity for small investors. Mayberry CEO Patrick Bataille highlights the difficulty “for smaller investors to find opportunities to make decent fixed income returns on their savings”.

“For instance, real estate has gone on a multi-decade run-up, the small or the young investor that is looking to make their money work for them by investing in real estate, will typically need a minimum investment running well into eight figures.”

He notes that there are ways for small investors to obtain exposure to real estate but they will typically need to either accept lower yields than if they owned the investment property themselves or accept higher risk from a leveraged financing structure, arguing that this offer provides a great opportunity for small investors.