Transcript Government of Jamaica

Government of Jamaica
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Jamaica Debt Exchange (“JDX”)
Individual Investor Presentation
January 19, 2010
Government of Jamaica
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Representative
Pamella McLaren
– Senior Director Debt Management – Ministry of Finance and the Public Service
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Government of Jamaica
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Introduction
Government of Jamaica
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High Levels of Debt
Debt / GDP
Interest as % of Tax Revenues
70.0%
150%
122% 124% 123%
117%
120%
124%
120%
117%
114%
110%
65.0%
Interest as % of Tax
130%
Total Debt/GDP (%)
65.1%
137%
140%
60.0%
57.0%
55.0%
50.3%
50.0%
47.6%
100%
90%
87% 89%
50.3%
45.0%
40.0%
80%
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2005/06
2006/07
2007/08
2008/09
E2009/10
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Government of Jamaica
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Programme Framework
Fiscal
Reform
Economic
Programme
Multilateral
Financial Support
and Monitoring
Jamaica Debt
Exchange
(JDX)
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Active
Passive
Historical
150
140
130
120
Total Debt/GDP (%)
Government of Jamaica
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Debt Dynamics at a Fork in the Road
160
110
100
Ukraine (B)
Belize (B+)
1
Jamaica
0/1 (B+)
01
/ 14
13 for Bs
0Median
F2
3
Uruguay
2/ 1
01
F2 Brazil (B+)
2
1/ 1
01
F2 Pakistan (B)
F2
/ 10
Turkey (B-)
9
00
/09
/08
/06
5
4/0
0Brazil
(B+)
Uruguay
Pakistan (B)
05
7
6/0 (B)
0Ukraine
Median for Bs
07
Belize (B+)
08
E2
20
20
20
20
20
Turkey (B-)
Jamaica (B+)
Source: IMF, excludes IMF debt
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Government of Jamaica
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Par for Par
J$ 100 Old Notes
J$ 100 New Notes
+
Accrued Interest
New Bonds:
- Longer Maturity
- Lower Coupon
- New Features: Fixed Rate Non-Call Life & CPI Bonds
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Government of Jamaica
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Choices for All Investors, Subject to Maturity Rules
Old Notes
Fixed Rates “FR”
Variable Rate “VR”
New Notes
Up to:
10
Choices
Up to:
21
Choices
New Fixed Rate
3-Months to 30 Years
New Variable Rate
1.5 Years to 22 Years
Inflation Indexed
12 Year and 20 Year
USD
Up to:
3 Choices
New USD
3, 4 & 6 Year
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Government of Jamaica
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How do I know which bonds I can choose?
1) Start with type of Old Note – and check the maturity table
2) If Fixed Rate Bond (“FR”) look at the maturity of your bond, example
15.75% due August 24 2011 (about 1.5 Years).
3) Look on Table 2 on page 10 of the document for the row corresponding
to this maturity range.
You will only have 3 choices in this case:

Fixed Rate 4-Year Bond with 12.50% coupon due 2014

Fixed Rate 6-Year Bond with 12.625% coupon due 2016

Fixed Rate 9-Year Bond with 12.75% coupon due 2019

ALL CHOICES NON-CALL LIFE
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Government of Jamaica
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Single-Choice “Retail” Window, J$ 5MM or less
Old Notes
Fixed Rates “FR”
Variable Rate “VR”
USD
New Notes
1 Choice
FR
1 Choice
1 Choice
VR
USD
Coupons:
12.25%
Tenors:
3 Years
Structure:
Not
Callable
Spread:
1 Month T Bill
+ 1.0%
Fixed
Period
11.75% for 3
Months
Tenors:
3.5 Years
Coupon:
6.75%
Tenor:
3 Year
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Government of Jamaica
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Submission Forms for Your Old Bond
 USD Old Bonds – Blue
 Fixed Rate Old Bonds –Yellow
 Variable Rate Old Bonds - Green
Data Required:
- Name, TRN
- Contact Information
- Note Series Name, Maturity
- Certificate Number and Amount
- Delivery Information
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Government of Jamaica
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Submitting an Offer
 You can submit yourself – or submit through your broker
 Eligible Investors:
Jamaican Residents
 Valid Submission:
Submission Form + Note Certificate
 Submission Form: Selection of New Bonds + Other Info
1 – 10 Certificates
 Use Physical Offer Submission Form
 Deliver to Bank of Jamaica
10+ Certificates
 Use Electronic Offer Submission Form
 Deliver to Ministry of Finance
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Government of Jamaica
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Delivering Certificates
Delivering Old Certificates to the Government of Jamaica:
 Required for all submissions
Receiving New Certificates from the Government of Jamaica:
 This can be to your home or to the care of your broker
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Government of Jamaica
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Transaction Processing Timeline
Launch Date
Expiration Date
Settlement Date
January 14, 2010
January 26, 2010
February 16, 2010
Registration
& Certificate
Delivery
• Cancellation of Old Bonds
• Credit for New Bonds
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Government of Jamaica
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Transaction Information
Ministry of Finance and the Public Service
www.mof.gov.jm
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
Information Memorandum
Investor Presentation
Press Releases
Certificate submission forms and instructions
Electronic submission spreadsheet
Q&A
Clarifications and amendments
Bank of Jamaica
www.boj.org.jm
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Government of Jamaica
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New Benchmark Bonds
Fixed Rate
Variable Rate
Maturity
Yield
3 Month
11.00%
6 Month
11.25%
1 Year
11.75%
2 Year
12.00%
3 Year
12.25%
4 Year
12.50%
6 Year
12.625%
9 Year
12.75%
14 Year
12.875%
30 Year
13.25%
USD
Maturity*
Margin
Index / Pay
Initial Fix
Initial Fix
Period
1.5 Year
1.0%
1 Month
11.75%
3 Month
2.5 Year
1.0%
1 Month
11.75%
3 Month
3.5 Year
1.0%
1 Month
11.75%
3 Month
5 Year
1.25%
3 Month
11.75%
6 Month
7 Year
1.375%
3 Month
11.75%
6 Month
8 Year
1.375%
3 Month
11.75%
6 Month
10 Year
1.50%
3 Month
11.75%
1 Year
16 Year
1.50%
3 Month
11.75%
1 Year
22 Year
1.50%
3 Month
11.75%
1 Year
* Variable bonds are callable after certain dates
CPI
Maturity
Yield
Maturity
Real Rate
3 Year
6.75%
12 Year
2% step to 4.00%
4 Year
7.00%
20 Year
2% step to 4.25%
6 Year
7.25%
Fixed Rate, USD, and CPI bonds are not callable
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Government of Jamaica
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Example Allocation Rules by Maturity – Table 2
 Example New Bond Election Options for Fixed Rate Bonds:
Group
Maturity Range of Old
Notes
Short FR
Package*
3Y Fixed
4Y Fixed
6Y Fixed
9Y Fixed
FR-A
2/17/2010 - 12/31/2010
x
x
x
x
x
FR-B
12/31/2010 – 6/30/2011
x
x
x
x
FR-C
6/30/2011 – 12/31/2012
x
x
x
FR-D
12/31/2012 – 12/31/2014
x
x
FR-E
12/31/2014 – 12/31/2017
FR-14
12/31/2017 - 12/31/ 2024
x
FR-30
After: 12/31/2024
x
14Y Fixed
30Y
Fixed
x
x
 Full “lookup” list will be posted on the website with all choices by each
bond. If you have any doubt please call your broker or the Ministry of
Finance.
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Government of Jamaica
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Reallocation Rules – Summarized in Table 1
Hypothetical Elections
Reallocation Option Exercised
$120
$120
$100
$80
$80
$50bn cap
$40
$40
$40
$0
$0
2023
2024
2025
$30
2023
$30
2024
2025
 The government may exercise its reallocations in the amortization profile
if it exceeds the $50bn cap
 Example above: 14Y FR can be split into 3 bonds with the same coupons
– 30% New Fixed Rate 13.0Y
– 40% New Fixed Rate 14.0Y
– 30% New Fixed Rate 15.0Y
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Government of Jamaica
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Questions & Answers
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