The National Water Commission (NWC) has decided to issue a $15 billion bond to clear debt it has from foreign loans, and NCB Capital Markets (NCBCM) was been chosen as the arranger for the venture. After a tender notice was put out by the NWC, various financial institutions offered solutions to address the Commission’s request, but in the end, NCBCM came out on top, according to Ambassador Senator Aubyn Hill, Chairman of the NWC. Senator Hill explained that NCBCM was equipped to meet the various criteria set out by the NWC. First, the arranger would have to agree to support the bond for a 40-year tenure at an interest rate of 13.5% in Jamaican Dollars, the only currency being used in the bond. In addition, Senator Hill said $5 billion will be used over the 40-year period to help clear any debts that the NWC now has. In fact, the Chairman explained that the very decision to have a bond issue was following on the heels of the Commission’s consistent foreign debt. “For the three year period, from 2013-2016 alone, the NWC had a loss of J$7.76 billion as a result of foreign currency loans,” he said at a press conference held recently. Bringing even more recent statistics was Prime Minister the Most Hon. Andrew Holness, who said that this venture was necessary to strengthen the balance sheet of the NWC. Holness admitted that the nation’s water utility company had a loss of J$1.7 billion just last year and is pleased that the NWC and NCBCM are working together to help resuscitate the financial state of the Commission. NCBCM says this bond issue is a historic moment in the evolution of local capital markets since this is the largest non-government guaranteed loan to date and the first sizeable one for the NWC. The Prime Minister said he was delighted for this, since, without the guarantee the Government would not be obligated to pick up the loan payments if the risk falls through, which he said aligns with the Government’s desire to control its “appetite for debt.” Furthermore, explaining the magnitude of the venture was Steven Gooden, CEO, NCBCM. “This $15 billion bond is the second largest private bond to date, as an $18 billion one as issued a few years ago, with NCB Capital Markets as arrangers,” he said. “This $5 billion is in the form of a 40 year instrument, and the only other investment tendered like this transaction, to my knowledge, without the Government of Jamaica’s guarantee was a $2.5 dollar raised for the Port Authority of Jamaica in 2014, which was also arranged by NCB, Capital Markets,” he said. Senator Hill explains that this bond issue in local currency is beneficial for the Commission as it seeks to balance its long-term secure revenue stream, reduce its list of foreign loans, while at the same time, serve the people of Jamaica in a more structured and purposeful way. Also present at the press conference was the emcee, Mark Barnett, President of the NWC, the Hon. Karl Samuda, Minister without portfolio, Ministry of Economic Growth and Job Creation, Audrey V. Sewell, Permanent Secretary in both the Office of the Prime Minister and the Ministry of Economic Growth and Job Creation, as well as various members of the NWC and NCBCM staff and attorneys from Gordon McGrath Law and Patterson Mair Hamilton, who worked as legal representatives for the bond issue.