Government of Jamaica Debut 20-Year Bond

Source: Financial Gleaner, December 14, 2001

The Bond has a 20-year maturity and will carry a coupon of 11.625 per cent. The issue was priced to offer a yield to maturity of 11.875 per cent. The manager/underwriter for the transaction is Bear, Stearns & Company Limited.

Minister Davies in commenting on this successful initiative hailed it as a most significant achievement for Jamaica. He noted that the country, which placed its First Bond on the private capital market in 1997, has now graduated to the stage where private investors are willing to purchase 20 year instruments. This has occurred in the face of significant difficulties currently being faced by other emerging market economies in the private bond market.

The issue satisfies the objectives outlined in the Government's Debt Management strategy of extending the maturity profile of bonds issued in the international capital markets and broadening the investor base. In addition, obtaining SEC Registration will facilitate more efficient trading of GOJ Bonds and will allow for even further broadening of the investor base.

The proceeds of the bonds will be used for general budgetary purposes and partly to prefund the 2002/2003 budget. Accessing these resources will reduce the demand for financing by the government from the domestic market, thus assisting in the reduction of interest rates and allowing the private sector access to more resources.