Wigton Debt Successfully Refinanced

Wigton Windfarms’ PetroCaribe loans amounting to approximately US$49.2 million ($6.4 billion) have been successfully refinanced, says Jermaine Deans, deputy general manager, JN Fund Managers Limited.

This is the critical first step to facilitate the power provider offering shares to the public in the first quarter of 2019, Deans said. JN Fund Managers handled the debt placement on behalf of the Development Bank of Jamaica (DBJ), which is managing the overall divestment of the State-owned power generator.

“We found that local pension fund managers, along with other local institutional investors, were very receptive to the series of bonds offered,” Deans said. “The entire process was completed by December 18.”

A wholly owned subsidiary of the Petroleum Corporation of Jamaica (PCJ), Wigton is the largest wind energy facility in the English-speaking Caribbean and was built by the Government to diversify Jamaica’s energy mix. The power company accounts for 6.2 per cent of the grid’s installed generating capacity and 3.7 per cent of Jamaica’s electricity generation.

“The bonds were attractive to those investors seeking longer-term, fixed-interest securities,” the investment banker pointed out. “In addition, the yields were attractive, based on current capital market conditions.”

Twenty-three government-owned assets have been privatised by the DBJ since 2009, and the Wigton transaction represents a new stage of its privatisation programme — which seeks to introduce other modalities including the listing of entities on the Jamaica Stock Exchange.

Finance and the Public Service Minister Dr Nigel Clarke recently publicly advocated a new thrust for the Government to utilise the local capital markets to open up broad-based access to the ownership of publicly owned assets.

Denise Arana, general manager, Public-Private Partnerships and Privatisation Services at the DBJ, pointed out that, “we have worked very closely with the Petroleum Corporation of Jamaica and Wigton Windfarm to execute this transaction.

“The refinancing is a very important initial step for Wigton Windfarm to manage its foreign exchange risk,” the DBJ executive stated. “I believe that this will position Wigton as a very successful transaction. The refinancing has also facilitated significant reflows to the Government’s coffers with the repayment of the PetroCaribe debt. We will now be focusing our efforts on executing the initial public offer.”