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Government of JamaicaGovernment of Jamaicazx
Jamaica Debt Exchange (“JDX”)
Individual Investor Presentation January 19, 2010
Government of JamaicaGovernment of Jamaicazx
2
Pamella McLaren
– Senior Director Debt Management – Ministry of Finance and the Public Service
Representative
Government of JamaicaGovernment of Jamaicazx
Introduction
Government of JamaicaGovernment of Jamaicazx
4
87% 89%
117%
122% 124% 123%120%
117%114%
124%
137%
80%
90%
100%
110%
120%
130%
140%
150%
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
E2009/10
Tot
al D
ebt/
GD
P (
%)
High Levels of Debt
Interest as % of Tax RevenuesDebt / GDP
57.0%
50.3%
47.6%
50.3%
65.1%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
2005/06 2006/07 2007/08 2008/09 E2009/10In
tere
st a
s %
of T
ax
Government of JamaicaGovernment of Jamaicazx
5
Programme Framework
EconomicProgramme
Fiscal Reform
MultilateralFinancial Support and Monitoring
Jamaica Debt Exchange
(JDX)
Government of JamaicaGovernment of Jamaicazx
6
Debt Dynamics at a Fork in the Road
Jamaica (B
+)
Turkey (B
-)
Brazil (B
+)
Uruguay
Pakistan (B
)
Ukraine (B
)
Median for B
s
Belize (B
+)
Turkey (B
-)
Jamaica (B
+)
Pakistan (B
)
Brazil (B
+)
Uruguay
Median for B
s
Belize (B
+)
Ukraine (B
)
Source: IMF, excludes IMF debt
100
110
120
130
140
150
160
2004/052005/062006/072007/082008/09E2009/10F2010/11F2011/12F2012/13F2013/14
Tot
al D
ebt/
GD
P (
%)
Active
Passive
Historical
Government of JamaicaGovernment of Jamaicazx
7
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
Government of JamaicaGovernment of Jamaicazx
8
Choices for All Investors, Subject to Maturity Rules
Variable Rate “VR”
Fixed Rates “FR”
USD
New Fixed Rate3-Months to 30 Years
New Variable Rate1.5 Years to 22 Years
Inflation Indexed12 Year and 20 Year
New USD3, 4 & 6 Year
Old Notes New Notes
Up to:10
Choices
Up to:21
Choices
Up to:3
Choices
Government of JamaicaGovernment of Jamaicazx
9
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
Government of JamaicaGovernment of Jamaicazx
10
Single-Choice “Retail” Window, J$ 5MM or less
Variable Rate “VR”
Fixed Rates “FR”
USD
FR
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
Old Notes New Notes
1 Choice
1 Choice
1 Choice
Government of JamaicaGovernment of Jamaicazx
11
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
Government of JamaicaGovernment of Jamaicazx
12
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
10+ Certificates
Use Physical Offer Submission Form
Deliver to Bank of Jamaica
Use Electronic Offer Submission Form
Deliver to Ministry of Finance
Government of JamaicaGovernment of Jamaicazx
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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
Government of JamaicaGovernment of Jamaicazx
14
Transaction Processing Timeline
• Cancellation of Old Bonds• Credit for New Bonds
January 14, 2010
Launch Date
January 26, 2010
Expiration Date
February 16, 2010
Settlement Date
Registration& Certificate
Delivery
Government of JamaicaGovernment of Jamaicazx
15
Transaction Information Ministry of Finance and the Public Service
www.mof.gov.jm 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
Government of JamaicaGovernment of Jamaicazx
16
New Benchmark Bonds
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%
Maturity Real Rate
12 Year 2% step to 4.00%
20 Year 2% step to 4.25%
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
Maturity Yield
3 Year 6.75%
4 Year 7.00%
6 Year 7.25%
Fixed Rate Variable Rate
USD CPI* Variable bonds are callable after certain dates
Fixed Rate, USD, and CPI bonds are not callable
Government of JamaicaGovernment of Jamaicazx
17
Example Allocation Rules by Maturity – Table 2
Example New Bond Election Options for Fixed Rate Bonds:
GroupMaturity Range of Old Notes
Short FR Package*
3Y Fixed 4Y Fixed 6Y Fixed 9Y Fixed14Y
Fixed30Y
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
x
FR-14 12/31/2017 - 12/31/ 2024
x
FR-30 After: 12/31/2024 x xFull “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.
Government of JamaicaGovernment of Jamaicazx
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$100
$0
$40
$80
$120
2023 2024 2025
Reallocation Rules – Summarized in Table 1
$50bn cap
Reallocation Option ExercisedHypothetical Elections
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
$30$40
$30
$0
$40
$80
$120
2023 2024 2025
Government of JamaicaGovernment of Jamaicazx
19
Questions & Answers