Durrant Pate/Contributor

Mayberry Jamaican Equities (MJE) is upsizing its latest bond offer and extending its closing date from last Friday (September 12) to September 26, subject to the right to early closure notice.

This is due to excess demand from the investing public for the offer, which was opened last month, seeking fresh capital to refinance existing debt and expand MJE’s investment portfolio. The offer has been upsized from an initial amount of J$1 billion to J$1.5 billion.

The two-tranche bond offer sees Tranche I offering an 8.75 per cent interest rate for 13 months, while Tranche II will offer a 9.25 per cent interest rate for 23 months. Each tranche has a size of J$500 million and can be upsized by J$250 million in both tranches, bringing the total capital raise to J$1.5 billion.

Bond secured by MJE shares in Supreme Ventures Limited

The bond will be secured by 115 million ordinary shares of Supreme Ventures Limited (SVL), MJE’s largest asset. These shares were worth over J$2.28 billion, which translated to a collateral coverage ratio of 1.52 times.

MJE will be subject to financial covenants, such as net debt to equity not exceeding 0.40 times and a minimum collateral coverage ratio of 1.5 times. Interest will be paid to bondholders every quarter, with the first payment scheduled for September 30.

The minimum amount to subscribe to either tranche is J$20,000 with increments of J$10,000. The expenses associated with the offer should not exceed J$40 million.

MJE raised $3.375 billion in June 2024 through three tranches with interest rates ranging from 9.25 per cent to 10.50 per cent to partially repay a margin loan facility to Mayberry Investments Limited (MIL), another subsidiary of Mayberry Group Limited, and expand its investment portfolio. 

MJE’s business involves holding long-term portfolio investments and active trading of Jamaican stocks on the JSE, with its income deriving largely from dividends from stocks, interest income from repurchase agreements, and realised gains on equity securities.

Delivered poor half-year results

MJE holds equity positions in more than 30 companies listed on the Jamaica Stock Exchange (JSE) valued at J$19.18 billion (US$120.12 million) as of June 30. MJE’s six-month (January to June) numbers saw it report a J$3.13 billion total operating loss compared to J$117.73 million in total operating income for the prior 2024 period. 

The loss was attributed to J$3.24 billion in unrealised losses on its equity investments and 58 per cent dip in dividend income from J$295.19 million to J$123.03 million. After accounting for interest expense and operating expenses, MJE had a net loss of J$3.55 billion compared to a net loss of J$468.13 million in the prior period.

MJE’s asset base declined 16 per cent over the six-month period from J$23.65 billion to J$19.87 billion, with cash at J$323.42 million. Total liabilities increased six per cent to J$6.11 billion while shareholders’ equity closed at J$13.76 billion for a book value of $11.46.