Saturday, February 24, 2018

Massy issues $1.2b in fixed rate bonds

 The Massy Group of Companies has issued $1.2 billion in fixed rate bonds to get long term financing to pay off existing debt and fund several new investments.

 Massy and sole lead arranger for the bond RBC Merchant Bank (Caribbean) recently agreed to the commercial terms of the bonds after which RBC arranged the bond offering to investors in Trinidad and Tobago.

 In an e-mailed statement to the Express yesterday, Massy (formerly Neal & Massy Holdings) said issuing a private bond was a way to borrow from several investors who are looking for solid investment opportunities over a fixed period of time. 

In a previous notice to shareholders on its website Massy said about $700 million of the proceeds from the bond offering were to pay off existing debt.

In its statement yesterday Massy added that it was also an “opportunity to get long term financing at low interest rates and to fund several new investments in the Retail, Energy and Automotive businesses”. 

“The amount was determined by assessing the need for investment and the Group’s capacity to borrow. The Group maintains good debt ratios after the bond is issued,” the Group said.

The bonds will be issued in up to three series, ranging in tenor from seven to 15 years. Massy said its bonds presented an “excellent opportunity” for institutions to invest for ten and 15 years with a company they can trust, who will comply with the interest and repayment terms of the bond.

 With regard to the outcome of the bond offering, Massy said: “Our expectations were to be able to raise the $1.2 billion at lower rates than the coupons that were proposed. These expectations were met in terms the weighted average yields, which came in lower than the coupon and it was oversubscribed.”

Several asset managers in Trinidad and Tobago invested in the Massy bonds.

Massy registered $652 million in profits in 2013. The group also spent “tens of millions” of dollars this year to rebrand its 60 or so subsidiaries across the Caribbean from Neal & Massy to “Massy”, Group chief executive Gervase Warner told the Express in July.

Massy shares closed trading on the stock market yesterday at $69 per stock unit.