Ashford W. Meikle, Business Reporter

Almeida

Michael Lee Chin's AIC (Barbados) Limited, which owns a 75 per cent stake in the National Commercial Bank Group, is seeking to raise US$10 million ($667 million) through a fixed rate secured note.

The bond, which will have a tenure of 18 months, with maturity in September 2008, will have a fixed coupon rate of 8.5 per cent, payable six months after the closing date and semi-annually up to the maturity date.

The lead arranger for the instrument is NCB Capital Markets (NCBCM), an NCB subsidiary, which has been successful in the past in raising billions in debt for AIC (Barbados) for the latter's investment in the Caribbean telecommunications company, Columbus Communications.

The purpose of the facility, according to NCBCM in documents obtained by Sunday Business, is to refinance existing loan facilities. NCBCM's managing director, Christopher Williams, however, declined to comment on the funding facility, which has pledged NCB ordinary shares as security.

"It's a private transaction," he told Sunday Business on Friday, without further elaboration.

bond maturity

However, an investment banker suggested that it could be that AIC was looking to finance a note that is due for maturity.

"I think it is one of two things: either they have a bond maturity and they are refinancing it; or, they call in a bond because they raise money to a lower coupon. More than likely it will be related to [the fibre-optic cable company] Flow because they have raised before in that way."

In fact, senior AIC executive, Robert Almeida, pretty much confirmed this to Sunday Business in a telephone interview from Canada.

"There are a number of different investments we make, using a combination of equity and debt. And then once we have that debt in place, it will come up on a periodic basis for maturity and depending on our limited time, we will either issue the same amount or pay out some," said Almeida, "whatever our capital requirements are at the time.

"This is the norm," he added, "It is not any different than any other company that has a commercial paper or note."

Lee Chin's AIC has, in recent times, made significant investments in Jamaica and the rest of the Caribbean.

In addition to Columbus Communications (Flow) and National Commercial Bank, the company has controlling interests in CVM Television, NCB Towers, Advanced General Insurance (the former UGI), Trident Villas and Hotel, Blue Lagoon, Reggae Beach and Medical Associates Hospital.

Almeida also dismissed the suggestion that, given the recent acquisition of Dehring Bunting and Golding by NCB's competitor, Scotiabank, AIC Barbados wanted to pay out the debt which AIC owes to the investment bank.

the deal

When AIC bought the Government's 75 per cent stake in NCB in March 2002, the deal involved the payment of $2.65 billion in cash and $3.38 billion in eight annual installments by AIC. Three years ago, the Government sold the $2.54 billion debt to DB&G.

"No, it has nothing to do with that. I don't think the Scotia acquisition of DB&G made any difference from our perspective and it is kind of hard to imagine that it makes a difference from their perspective. It's corporate finance paper in the marketplace so I can't see why the change in ownership will make a difference," he said.

ashford.meikle@gleanerjm.com