Durrant Pate/Contributor

The Michael-Lee Chin-controlled Portland (Barbados) Limited has missed the May 9 deadline and is now formally in default of a US$23 million bond, which Republic Bank, which is headquartered in Trinidad and Tobago, serves as trustee.

Portland (Barbados) has reportedly missed the final payment of principal and interest on the US$23 million short-term facility, which carries an interest of 8.25 per cent and matures on April 30. The note was issued on April 28, 2022, for a two-year term

Republic Bank has explained that failure by Portland (Barbados) to make the final bullet payment within seven business days from April 30 constitutes a default and noteholders and/or trustees are entitled to take such enforcement actions as are permitted under the trust deed. The seven business days is the grace period allowed in the trust deed between the parties and that grace ended on May 9.

However, a deal has been reached in which bondholders are giving Portland (Barbados) three months to pay off the debt and interest. The Trinidad Guardian reports that the current collateral for this reprieve is US$4 million in cash as well as shares in Jamaica’s NCB Financial Group (NCBFG), which is also majority-owned by Lee Chin. 

The NCBFG shares were pledged with the official stock exchanges of Jamaica and Trinidad and Tobago. Those shares would have been pledged by Lee-Chin, who is listed as the majority shareholder of NCBFG with a total of 1,445,299,340 shares.

In the deal Portland Barbados stated, “….by signing this agreement acknowledges and agrees that as of May 9, 2024, an event of default has occurred and the noteholders are entitled to exercise their enforcement and other rights under the trust.”  Portland Barbados also acknowledged and agreed that by signing the agreement, it entered into a repayment plan that was agreed to by a majority of the noteholders on May 9. 

As outlined in the distribution schedule, the noteholders are due to receive a total of US$20 million between May 29 and August 15. The basis of the repayment plan is that the noteholders should receive payments in May, June and August.

According to the letter, Portland Barbados agreed to the following:

• The company (Portland Barbados) to pay to the trustee the sum of US$4 million together with interest due and payable as at April 30, 2024, on/before May 29;

• The company to pay to the trustee the sum of US$4 million on/before June 15;

• The company to pay to the trustee the sum of US$8 million together with interest, as set out below…due and payable as at August 15 on/before August 15;

• The company will pay to the trustee as part of the August payment, interest calculated at 10.25 per cent per annum, being the interest rate specified in the supplemental trust deed (8.25 per cent), plus the default rate (of 2 per cent). However, should the company default in any of its payment obligations as specified in this agreement, the company will pay noteholders interest at a rate of 12.25 per cent per annum, being the default rate (2 per cent), plus the current rate payable of 10.25 per cent.

• Portland Barbados agreed to pay the trustee US$16 million plus interest between May 29 and August 15. Portland Barbados has no objection to the trustee making the following distributions between May 20 and August 15 to noteholders;

• Distribution to the noteholders on a pro-rata basis on/before May 29 of the current cash collateral of US$4 million;

• Distribution to noteholders on a pro-rata basis on/after May 29, of US$4 million plus interest from the May payment;

• Distribution to noteholders on a pro-rata basis on/after June 15, 2024, of US$4 million from the June payment; and

• Final distribution to noteholders of the remaining principal (US$8 million) and interest on/after August 15 from the August payment.