What are the implications of Jamaica’s first international domestic currency bond offer?

JAMAICA / BAHAMAS - Report 13 Nov 2023 by Keith Collister

On November 3, 2023, the Government of Jamaica (GOJ) issued its first Jamaican dollar-linked international bond for J$46.6 billion, or roughly US $300 million. The seven year SEC registered bond had a coupon of 9.625%, and was issued at a slight discount for a yield to maturity of roughly 9.75%. The issue was oversubscribed 1.4 times, with 93.5% bought by international investors and only 6.5% coming from domestic investors.

At first glance the yield offered on the international Jamaican dollar bond looks quite attractive relative to local Jamaican-dollar issued debt. Using the last PSOJ domestic yield curve data collected for the end of October, the new 7-year bond issued at 9.625% internationally compares very favorably with the 7-year domestic dollar instrument with a projected yield to maturity of 7.145%. So, why were locals not more interested? In this report, we answer that question, as well as delving into other characteristics of the new bond issue.

Now read on...

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