Fontana Limited Raises J$500.0Mn In Capital

• Scotia Investments Jamaica Limited acted as Lead Arranger and Broker to successfully raise J$500.0Mn of debt capital by way of a private placement of bonds for Fontana Limited. The proceeds of the offer will support Fontana’s continued growth which includes plans to develop a warehouse and distribution center in Kingston, as well as a new store in Portmore. 
• The transaction was executed at a time when BOJ policy rates were increased for the first time in 13 years. The Ministry of Finance and Planning had also recently reopened Government of Jamaica long-term bonds that were taken up at yields that indicated that the long-term rates in the Jamaican Dollar debt space were increasing. 
• In light of the changing market conditions, the arrangers pursued a fixed to variable rate bond structure. This financing strategy provides Fontana with a competitive rate in the short term and the potential to lower the rate in the future if market rates reduce in the longer term. 
• According to its Annual Report, 2021 has been Fontana’s most successful year to date. Revenues were up $5.2Bn, a 14.2% increase over the $4.5Bn of the previous year (2020) with sales growth outpacing that of the overall Jamaican retail sector. The company also grew its profits by 85% year over year, which helped to bolster its success in securing the debt capital required to seize the opportunities for expansion in Portmore and Kingston.

(Source: JSE News)