Government Secures US$480Mn Securitisation- Norman Manley International Airport

  • The Government of Jamaica (GOJ) announced that it secured US$480Mn in its first structured securitisation transaction in the international capital markets. The transaction involved the securitisation of the portion of the Norman Manley International Airport (NMIA) revenue that is due to the GOJ.
  • Securitisation of the NMIA revenue was achieved through the issuance of a US$480 million, 12-year bond in the international capital markets by Kingston Airport Revenue Finance Ltd (the “Issuer”). Kingston Airport Revenue Finance Ltd. (KingAir) is a special purpose vehicle held in trust in the Cayman Islands, whose actions are limited to the terms of its debt, and which dissolves after it repays its debt.
  • The GOJ granted Kingston Airport Revenue Finance Ltd. its rights to 52.33% of the revenue generated by the Norman Manley International Airport (the “KingAir RevShare”) in exchange for the US$480Mn that was raised through the bond issue.
  • The bond issuance was highly successful, with applications totalling US$2.3Bn, representing an oversubscription of over five times the US$440Mn initially sought. The offer was upsized to US$480Mn in response to this robust demand. The Notes will bear a fixed coupon of 6.75% for 12 years and are rated BB and Ba1 by Standard & Poor’s Global Ratings and Moody’s Rating Agency respectively, one notch above each Agency’s sovereign rating for Jamaica.
  • Additionally, the Notes are the sole obligation of the Issuer, Kingston Airport Revenue Finance Limited, and there is no recourse to the Government of Jamaica. That is, the Notes do not represent debt obligations of the Government of Jamaica or any of its agencies.
  • Kingston Airport Revenue Finance Ltd will also annually distribute to the Government of Jamaica any surplus it achieves above established benchmarks. Once the bond is repaid, the full amount of the KingAir RevShare will return to the Government of Jamaica.
  • The GOJ noted that it looks forward to now being able to accelerate critical investments in domestic infrastructure, while at the same time reducing the national debt burden, even in the context of the adverse travel advisory and hurricane induced growth shock and the anticipated flat growth this year, for the benefit of all Jamaicans.

(Source: Ministry of Finance)