NCB to accept NDX offer

National Commercial Bank Jamaica said Wednesday that it will participate fully in the National Debt Exchange.

The banking group is one of the largest holders of GOJ securities. Its decision was made at a board meeting Tuesday, the same day that other large bondholders, namely Sagicor Life, Scotia Group, Guardian Life and the GraceKennedy group, announced that they will take up the offer. NDX will shave 1-5 per cent off coupon rates and extend the maturity profiles of GOJ bonds up to 2050.

NCB Group Managing Director, Patrick Hylton, sees the bank’s participation in the debt swap as “critical” given the gravity of Jamaica’s fiscal and economic status, saying the success of NCB as the “predominant” financial institution, is closly tied to the strength of Jamaica’s economy, he said in a company issued statement.

The bank holds at least J$70 billion of GOJ securities, according to central bank data.

This is the second debt swap being undertaken by Jamaica in three years. The first, JDX in 2010, which swapped out J $702 billion worth of debt, was also arranged prior to a US$1.27 billion IMF bailout programme that was supposed to place the national debt on a sustainable path and put Jamaica on track to balance its fiscal accounts, among a ream of financial and other reforms.

The IMF programme got derailed a year into the agreement and was placed on hold.

The NDX aims to save J$17 billion per year on bond debts now valued at J$860 billion as pre-condition for a new US$750 million agreement.

“We must ensure this never ever happens again and hold the Government accountable for implementing the required policies, programmes and fiscal discipline to ensure we meet and exceed our targets.” Hylton said.

The NDX offer closes Thursday and will be settled Friday.

business@gleanerjm.com