Download Government of Jamaica

Government of Jamaica
zx
Jamaica Debt Exchange (“JDX”)
Individual Investor Presentation
January 19, 2010
Government of Jamaica
zx
Representative
Pamella McLaren
– Senior Director Debt Management – Ministry of Finance and the Public Service
2
Government of Jamaica
zx
Introduction
Government of Jamaica
zx
High Levels of Debt
Debt / GDP
Interest as % of Tax Revenues
70.0%
150%
122% 124% 123%
117%
120%
124%
120%
117%
114%
110%
65.0%
Interest as % of Tax
130%
Total Debt/GDP (%)
65.1%
137%
140%
60.0%
57.0%
55.0%
50.3%
50.0%
47.6%
100%
90%
87% 89%
50.3%
45.0%
40.0%
80%
10
9/
00
E2
9
/0
08
20
8
/0
07
20
7
/0
06
20
6
/0
05
20
5
/0
04
20
4
/0
03
20
3
/0
02
20
2
/0
01
20
1
/0
00
20
0
/0
99
19
2005/06
2006/07
2007/08
2008/09
E2009/10
4
Government of Jamaica
zx
Programme Framework
Fiscal
Reform
Economic
Programme
Multilateral
Financial Support
and Monitoring
Jamaica Debt
Exchange
(JDX)
5
Active
Passive
Historical
150
140
130
120
Total Debt/GDP (%)
Government of Jamaica
zx
Debt Dynamics at a Fork in the Road
160
110
100
Ukraine (B)
Belize (B+)
1
Jamaica
0/1 (B+)
01
/ 14
13 for Bs
0Median
F2
3
Uruguay
2/ 1
01
F2 Brazil (B+)
2
1/ 1
01
F2 Pakistan (B)
F2
/ 10
Turkey (B-)
9
00
/09
/08
/06
5
4/0
0Brazil
(B+)
Uruguay
Pakistan (B)
05
7
6/0 (B)
0Ukraine
Median for Bs
07
Belize (B+)
08
E2
20
20
20
20
20
Turkey (B-)
Jamaica (B+)
Source: IMF, excludes IMF debt
6
Government of Jamaica
zx
Par for Par
J$ 100 Old Notes
J$ 100 New Notes
+
Accrued Interest
New Bonds:
- Longer Maturity
- Lower Coupon
- New Features: Fixed Rate Non-Call Life & CPI Bonds
7
Government of Jamaica
zx
Choices for All Investors, Subject to Maturity Rules
Old Notes
Fixed Rates “FR”
Variable Rate “VR”
New Notes
Up to:
10
Choices
Up to:
21
Choices
New Fixed Rate
3-Months to 30 Years
New Variable Rate
1.5 Years to 22 Years
Inflation Indexed
12 Year and 20 Year
USD
Up to:
3 Choices
New USD
3, 4 & 6 Year
8
Government of Jamaica
zx
How do I know which bonds I can choose?
1) Start with type of Old Note – and check the maturity table
2) If Fixed Rate Bond (“FR”) look at the maturity of your bond, example
15.75% due August 24 2011 (about 1.5 Years).
3) Look on Table 2 on page 10 of the document for the row corresponding
to this maturity range.
You will only have 3 choices in this case:

Fixed Rate 4-Year Bond with 12.50% coupon due 2014

Fixed Rate 6-Year Bond with 12.625% coupon due 2016

Fixed Rate 9-Year Bond with 12.75% coupon due 2019

ALL CHOICES NON-CALL LIFE
9
Government of Jamaica
zx
Single-Choice “Retail” Window, J$ 5MM or less
Old Notes
Fixed Rates “FR”
Variable Rate “VR”
USD
New Notes
1 Choice
FR
1 Choice
1 Choice
VR
USD
Coupons:
12.25%
Tenors:
3 Years
Structure:
Not
Callable
Spread:
1 Month T Bill
+ 1.0%
Fixed
Period
11.75% for 3
Months
Tenors:
3.5 Years
Coupon:
6.75%
Tenor:
3 Year
10
Government of Jamaica
zx
Submission Forms for Your Old Bond
 USD Old Bonds – Blue
 Fixed Rate Old Bonds –Yellow
 Variable Rate Old Bonds - Green
Data Required:
- Name, TRN
- Contact Information
- Note Series Name, Maturity
- Certificate Number and Amount
- Delivery Information
11
Government of Jamaica
zx
Submitting an Offer
 You can submit yourself – or submit through your broker
 Eligible Investors:
Jamaican Residents
 Valid Submission:
Submission Form + Note Certificate
 Submission Form: Selection of New Bonds + Other Info
1 – 10 Certificates
 Use Physical Offer Submission Form
 Deliver to Bank of Jamaica
10+ Certificates
 Use Electronic Offer Submission Form
 Deliver to Ministry of Finance
12
Government of Jamaica
zx
Delivering Certificates
Delivering Old Certificates to the Government of Jamaica:
 Required for all submissions
Receiving New Certificates from the Government of Jamaica:
 This can be to your home or to the care of your broker
13
Government of Jamaica
zx
Transaction Processing Timeline
Launch Date
Expiration Date
Settlement Date
January 14, 2010
January 26, 2010
February 16, 2010
Registration
& Certificate
Delivery
• Cancellation of Old Bonds
• Credit for New Bonds
14
Government of Jamaica
zx
Transaction Information
Ministry of Finance and the Public Service
www.mof.gov.jm







Information Memorandum
Investor Presentation
Press Releases
Certificate submission forms and instructions
Electronic submission spreadsheet
Q&A
Clarifications and amendments
Bank of Jamaica
www.boj.org.jm
15
Government of Jamaica
zx
New Benchmark Bonds
Fixed Rate
Variable Rate
Maturity
Yield
3 Month
11.00%
6 Month
11.25%
1 Year
11.75%
2 Year
12.00%
3 Year
12.25%
4 Year
12.50%
6 Year
12.625%
9 Year
12.75%
14 Year
12.875%
30 Year
13.25%
USD
Maturity*
Margin
Index / Pay
Initial Fix
Initial Fix
Period
1.5 Year
1.0%
1 Month
11.75%
3 Month
2.5 Year
1.0%
1 Month
11.75%
3 Month
3.5 Year
1.0%
1 Month
11.75%
3 Month
5 Year
1.25%
3 Month
11.75%
6 Month
7 Year
1.375%
3 Month
11.75%
6 Month
8 Year
1.375%
3 Month
11.75%
6 Month
10 Year
1.50%
3 Month
11.75%
1 Year
16 Year
1.50%
3 Month
11.75%
1 Year
22 Year
1.50%
3 Month
11.75%
1 Year
* Variable bonds are callable after certain dates
CPI
Maturity
Yield
Maturity
Real Rate
3 Year
6.75%
12 Year
2% step to 4.00%
4 Year
7.00%
20 Year
2% step to 4.25%
6 Year
7.25%
Fixed Rate, USD, and CPI bonds are not callable
16
Government of Jamaica
zx
Example Allocation Rules by Maturity – Table 2
 Example New Bond Election Options for Fixed Rate Bonds:
Group
Maturity Range of Old
Notes
Short FR
Package*
3Y Fixed
4Y Fixed
6Y Fixed
9Y Fixed
FR-A
2/17/2010 - 12/31/2010
x
x
x
x
x
FR-B
12/31/2010 – 6/30/2011
x
x
x
x
FR-C
6/30/2011 – 12/31/2012
x
x
x
FR-D
12/31/2012 – 12/31/2014
x
x
FR-E
12/31/2014 – 12/31/2017
FR-14
12/31/2017 - 12/31/ 2024
x
FR-30
After: 12/31/2024
x
14Y Fixed
30Y
Fixed
x
x
 Full “lookup” list will be posted on the website with all choices by each
bond. If you have any doubt please call your broker or the Ministry of
Finance.
17
Government of Jamaica
zx
Reallocation Rules – Summarized in Table 1
Hypothetical Elections
Reallocation Option Exercised
$120
$120
$100
$80
$80
$50bn cap
$40
$40
$40
$0
$0
2023
2024
2025
$30
2023
$30
2024
2025
 The government may exercise its reallocations in the amortization profile
if it exceeds the $50bn cap
 Example above: 14Y FR can be split into 3 bonds with the same coupons
– 30% New Fixed Rate 13.0Y
– 40% New Fixed Rate 14.0Y
– 30% New Fixed Rate 15.0Y
18
Government of Jamaica
zx
Questions & Answers
19