By Al Edwards, Business Co-ordinator 
Wehby and Orane
GEORGETOWN, Cayman Islands:
ON Tuesday, Grace Kennedy & Company launched the Caribbean's first U.S. dollar fixed income fund based in the Cayman Islands. The fund will invest in the U.S. dollar sovereign bonds of Jamaica, Barbados, Trinidad and Tobago, Grenada and Belize all rated by the international rating agencies. Panama and Costa Rica are to be considered and may well be offered in the near future.
The Grace Caribbean Fixed Income Fund was listed on the Cayman Islands Stock Exchange on September 20,2002. The Grace Fund will be managed by Grace Kennedy Capital Services Ltd.(Cayman GKCS) which is a fully owned subsidiary of Grace, Kennedy Ltd.
Grace has obtained a Cayman Restricted Mutual Fund Administrator's licence allowing the conglomerate to administer a family of 10 mutual funds. To this end, it plans to launch a Caribbean Equity Fund and a US$ Caribbean Corporate Bond Fund over the next two years. The company will offer 50 million participating shares of US$10.00 per share with the minimum initial investment requirement set at US$10,000 per investor. For each subsequent investment, the minimum is US$1,000 which can be varied at the discretion of the directors.
FIRST OF ITS KIND
The Fund is the first of its kind in the Caribbean. Briefing both Jamaican and Caymanian journalists, Grace's chairman and chief executive officer, Douglas Orane, said: "The objective of the Grace Fund is to provide investors with a secure investment instrument designed to yield relatively high income compared to the yield on other instruments of its kind or to the income realised on U.S. dollar bank deposits.
"The Fund will achieve this goal by maintaining a diversified portfolio of investments in U.S. dollar fixed income securities of varying maturities and risk.
"Our goal is to have half of the Group's profits come from outside of Jamaica by 2005.
"Over the last 10 to 15 years many of the Governments of the English-speaking Caribbean have increasingly been going to the international capital markets to raise foreign funds particularly US-denominated instruments whereas before they would borrow internally in their own currencies.
"But when these countries go to the international capital markets they are tied to amounts of US$100 million or US$200 million which is tiny amounts in the world we live in today. These bonds are largely overlooked and so the Caribbean has to pay a premium in terms of interest to get the attention of the market in order to get those bonds placed.
"What we have done is to garner those bonds into our mutual Fund and then to offer them back to resident Caribbean people and that's the reason you are able to get a higher than average return. US Caribbean people understand the risk, we live in the region and we know our countries have never reneged on any foreign debt ever, so therefore the risk is a good one and so we believe there is a market for our Fund."
Grace has managed to get some reputable financial institutions to both distribute and act as custodians of the fund. British American Bank is the Fund's distributor and will market and sell shares of the Fund with Salomon Smith Barney appointed to provide custodian services in respect of the investment assets of the Fund. British American Bank was established in Georgetown, Grand Cayman, in 1980. The Bank operates under a category 'A' banking licence. It specialises in the provision of competitive mortgage and consumer loans, primarily to local residents, and the funding of those loans through short to medium term deposits from both Caymanian and off-shore deposits.
Its Board of Directors will comprise Raymond Chang (Chairman), Douglas Orane, Don Wehby, Wayne Ray, John Bellamy, C. André Iton and Subhas Ramkhelawan.
Don Wehby, Grace, Kennedy's Chief Financial Officer, said: " The Fund may not invest more than the following percentages of its total assets in the fixed income securities of any of the following countries:
-40% in securities of any single Caribbean country including Trinidad & Tobago, Barbados, Jamaica, The Bahamas and Belize
-20% in securities of any other Caribbean country
-10% each in securities of Panama and Costa Rica
Commenting on the new Grace Caribbean Fund, Raymond Chang said in the company's literature brochure:" The fixed income market in the Caribbean is largely overlooked and misunderstood by dealers external to the region; as a result, investors in the Caribbean fixed income market are provided with opportunities to earn above average returns. I have every confidence that the Grace Caribbean Fixed Income Fund will be welcomed by the investing public." Initially the Fund will not be available to United States residents. Up to November 14 one can buy into the Fund at US$10 per stock unit (par value).
Mr. Wehby said, "We have sent our application to register the Fund in Jamaica and we are hoping that the process will be completed shortly."
For more info on the Fund read Grace's website, www.gkfund.com.
