THE GOVERNMENT raised Euro 200 million ($15.3 billion) yesterday from an 11 per cent 2012 Eurobond.The Ministry of Finance (MOF) stated that the issue was launched and priced within five hours as there was, "an overwhelming demand from institutional and retail investors in Europe."
Jason Morris, Jamaica Money Market Brokers Ltd. Investment Research and Sovereign Risk Analyst, said the issue was oversubscribed, as Jamaica initially planned to raise Euro$100 million.
The issue follows from the successful 'roadshow' by the Minister of Finance and Planning and a technical team, which visited major European cities in May 2004, the statement said.
REDUCE ITS PRESENCE
It said the receipt of the funds will allow he Government to reduce its presence in the local market, thus facilitating further reduction in the domestic interest rates and stability in the foreign exchange market.
The bond matures on July 27, 2012, with the first coupon payment due on July 27, 2005. Commerzbank AG and Deutsche Bank AG London were the issuers.
"Jamaica has now raised US$346 million in the space of two weeks, following US$100 raised in the domestic market two weeks ago," Mr. Morris said. The current issue is likely to push Jamaica's NIR close to US$1.9 billion at the end of July.
However, the NIR is likely to fall closer to US$1.7 billion in August after a maturing Euro$175 million bond during that month, Mr. Morris said. The NIR target for the end of the fiscal year (March 2005) is US$1.3 billion.
The current issue is likely to confirm foreign exchange market stability, Mr. Morris said, "which may result in the return to the downward trajectory in domestic interest rates in the near term."
