Chris Williams, managing director of NCB Capital Markets. - File

After raising $310 million twice by way of a renounceable rights issue of its preference shares, NCB Capital Markets (NCBCM) has again upsized its offer and is making available 100 million preference shares.

According to the company, it was done to meet the high level of investor demand for the offerings, claiming the first two offerings were oversubscribed. However, the company refused to indicate the extent of the oversubscription.

Tripling capital base

At the end of August 17, NCBCM may gain $930 million from its original target of $310 million, thereby tripling its total capital base.

"NCB Capital Markets has received a record number of acceptances from its existing preference shareholders, as well as applications for preference shares renounced in favour of third parties and for those preference shares which 'fell into' the excess shares pool," outlined NCBCM marketing communications officer, Denise Johnston, in a press statement late last week to shareholders.

"The high demand for the preference shares is primarily as a result of the attractiveness of the offer due to the competitive after-tax yield for the instrument," explained Christopher Williams, managing director.

NCB Capital Markets opened its rights issue of 11.75 per cent cumulative redeemable preference shares on June 27 at a price of $3.10 per preference share.

Redeemable preference shares

This meant existing shareholders of NCBCM's 11.75 per cent redeemable preference shares could increase their holdings at $3.10 per share by an offer giving them the right to acquire an additional share for each preference share they currently own.

The offer was for a month but was extended beyond the July 27 closing date to add another 100 million preference shares. This third offer will now be closed on August 17.

Vice-president of distribution at NCBCM, Deborah Lopez said, "We retain the right to upsize the offer."

Lopez said the funds raised from the third offering would be used to undertake various types of investments. She, however, would not disclose the exact nature of the investments, claiming that the information was for the competitive advantage of NCBCM's clients.

business @gleanerjm.com