Janet Hines, acting general manager and director of finance of the Jamaica Mortgage Bank. - File

Jamaica Mortgage Bank (JMB) will float new domestic bonds to raise $1 billion that will build on funds targeted for lending to developers and the mortgage market.

The plan follows its raising of $1.1 billion last year through targeted placements.

The new debt is projected to boost the agency's 'bonds payable' to $2.5 billion, from $1.5 billion last year; and increase its total indebtedness to $3.6 billion, up from $2.5 billion at the end of fiscal 2006/07.

Acting general manager Janet Hinds said through her assistant that she was not prepared to comment on the pending floats, but the Ministry of Finance is reporting that the funds raised will be disbursed equally to the mortgage bank's primary and secondary lending markets.

Lends to boost

The agency finances housing developments but also lends to private mortgage institutions to boost the level of funding available for loans to real estate investors and home buyers.

Loans to the secondary market are targeted at $500 million.

JMB is projecting new loan disbursements of $2.3 billion to developers of projects that are expected to add 3,287 new units to the housing stock islandwide, among them Bucks Haven, $350m; Spanish Village, $250m; Discovery Point, $200m, Green Park, $105m; and Stony Hill Homes, $100m.

But only $1.97 billion of the total is expected to be allocated within this year.

The disbursements are to be financed largely by loan reflows of $1.37 billion, JMB's own cash reserves, as well as the bond float.

Its accumulated profits were estimated at $984 million last year, and are projected to climb to $1.14 billion by the end of March 2008, if the estimates for the agency's profit performance holds at $140 million.

The bonds now seem to be a regular financing source for the self-financing agency, it having raised a similar amount of funds last year when Milverton Reynolds ran the agency, through private placements with different agencies and lenders.

Then, the agencies tapped were National Housing Trust, the Economic Development Bank of Venezuela, and a local building society.

Reynolds has since been appointed head of the Development Bank of Jamaica.

Wednesday Business was unable to clarify with Hines, who is also the director of finance, whether JMB would float the bonds under similar conditions or attempt wider subscription.

JMB's targeting lending programme for this year represents a near $400 million improvement on the $1.57 billion of disbursements last year.

lavern.clarke@gleanerjm.com