Dec 2012 Financial News

Scotia grabs 40% share of capital market

Dec 12, 2012

SCOTIABANK Jamaica's Capital Markets unit has arranged over US$500 million in financing for regional businesses and government agencies over the past two years.

The deals were inked as a result of a push by the investment bank's to diversify its investment strategy, in light of lower interest rate climate after the JDX in early 2010.

Now the bank estimates it has captured 40 to 45 per cent of the market share, by Bruce Bowen's estimates.

This unit has defined a blueprint that sets it aside from others, said the Scotiabank Jamaica president.

Execution and innovation are two of Scotia Capital Markets' core principles, according to Berisford Grey, senior vice-president, origination and capital markets at Scotia Investments.

"Some solutions have been applied before, and others were never done before," he said.

One example of such innovation was the $1.2-billion build-own-lease deal for MegaMart's Mandeville superstore, which Scotia Investments secured in February. The wholesale club secured long-term financing, which may not have been accessible in the debt market, Grey said. It now holds a 20-year lease of the property.

MegaMart Mandeville may be open in time for Christmas, said Gassan Azan, MegaMart chief executive officer.

"Our Capital Markets innovative structuring and distribution allowed MegaMart to widened its funding base beyond bank financing by bringing new classes of investors on board," Scotia Investments said.

The investment bank also secured much larger transactions, notably those secured by Facey Group. For instance, it was the lead arranger of a US$182-million regional syndicated loan for Facey Group.

That transaction spanned several jurisdictions with multiple currencies.

"This transaction served all our needs. We were doing a banking transaction across 30 markets in Central America and the Caribbean," said Nigel Clarke, Facey's chief executive officer.

As a result, the company, which is part of the group that owns Seprod, the makers of Chiffon and Kraft snacks, and Serge Island dairies, turned its senior debt into a single facility.

"We thought it was complicated, but Scotia worked with banking and securities laws that were incongruous and required a lot of innovation," Clarke said.

Scotia Investments Jamaica's unit is part of the Caribbean Capital Markets Group (CCMG), which has another team located in Trinidad and Tobago.

As part of CCMG, the capital markets team delivers investment banking products and services to Scotiabank clients in Jamaica and the English speaking Caribbean.

Work is also closely done with Scotiabank's global investment banking units in New York and Toronto to bring financing solutions/investment banking products to its regional clients.

Already, the local capital market has plugged into global investment platform of Scotia through a unit called Global Banking and Market. Grey said: "Within that unit, we can execute as well as any international bank across the globe."

Last week, US$400 million was raised for Scotia Peru; it was five times oversubscribed and was distributed to investors from Brazil to Hong Kong.

"That's the type of capabilities that we have plugged in from Jamaica and we look at opportunities across the Caribbean, whatever the case we can leverage those resources," Grey said.


Source:
BY SHAMILLE SCOTT Business reporter scotts@jamaicaobserver.com
Jamaica Observer
Wednesday December 12, 2012

http://www.jamaicaobserver.com/business/Scotia-grabs-40--share-of-capital-market_13194868