The Caa2/B/B- rated sovereign sold an amortizing 6.75% $1.35bn 2028 and a 7.875% $650m 2045. The 2028 has an average life of 11.7 years and was sold at 99.96 to yield 6.75%. The 2028 note has a long first coupon, due in April 2016. The 30-year tranche note was sold at par.
| Kingston, Jamaica |
Bookrunners Bank of America-Merrill Lynch and Citi dropped the pricing on the bonds from initial price thoughts of the 6% to 7% and 8.5% areas, and from guidance of 6.75% to 6.875% and 8%.
Jamaica’s amortizing 2025 note was seen trading on Thursday to yield 6% and its 2036 notes at 7%.
Before launch, a new issue from slightly higher-rated Zambia looked more attractive than Jamaica’s bond, one investor said. B1/B/B rated Zambia sold a $1.25bn 2025 note to yield 9.375% on Thursday.
“[Jamaica] is a stable credit from a ratings agency perspective but deteriorating in terms of macroeconomic fundamentals,” the bond buyer said.
The island nation will use $1.5bn of the issue to pay back debt with Venezuelan oil company PDVSA.
Investors and DCM bankers have expected Jamaica to attempt to broker a deal similar to one from the Dominican Republic at the beginning of the year. In January, the B1/B+/B+ DomRep raised $2.5bn in the cross-border market and paid PDVSA $1.93bn, while the oil company forgave the rest of its debt, about $2bn.