In a Bloomberg article by Paula Sambo and Ezra Fieser that appeared on Wednesday afternoon entitled “Jamaica Selling Global Dollar Bonds as It Focuses on Growth”, Sean Newman, a Jamaican money manager at Atlanta-based Invesco, advised that the government was looking to take advantage of low global interest rates, adding, “We believe the sovereign is going for gold with this transaction. A successful tender will result in a net debt stock reduction, improving debt/GDP ratios, and lower debt service cost.”

According to a final term sheet issued by the major banks involved — Citibank and Merrill Lynch — the net amount the Government of Jamaica received was a little over US$846.414 million from the re-opening of Jamaica’s 2039 Eurobond, representing the product of US$743.238 million in the principal value of the bonds issued, multiplied by their issue price of 114.082 per cent (par equals 100). Because the bonds have a coupon (interest rate) of 8.0 per cent and mature in 2039, their yield to maturity is therefore 6.75 per cent.

In our conversation Friday, Newman observed that this yield, effectively the interest rate at which the bonds were issued due to the 14 per cent premium over face value paid to the Government, “is probably the lowest coupon that Jamaica has ever issued at”.

http://www.jamaicaobserver.com/business/Jamaica-wins-gold-with-global-debt-swap-deal_70516