Apr 2013 Financial News

NCBJ - Impact of National Debt Exchange

Apr 18, 2013

National Commercial Bank Jamaica Limited (NCBJ) has informed the Stock Exchange that the Company and its subsidiaries exchanged in aggregate approximately J$118 billion of Government of Jamaica securities in the National
Debt Exchange. In another transaction, NCBJ and one of its subsidiaries exchanged in aggregate approximately J$7 billion of Government of Jamaica securities in a private debt exchange. The securities were exchanged for other
securities with lower coupons and different maturity dates.

NCBJ expects an adverse impact during the current financial year (ending September 30, 2013) on the Company’s gains on foreign currency and investment activities, and interest income from securities held. Given that the coupons on the securities offered were higher than those on the securities received after the exchange, if it continues to hold the securities received, the interest earned on them would continue to be lower until those securities mature. There may, therefore, continue to be an impact on interest earned in future years, though there are greater uncertainties around predicting the impact that will be experienced in future years. Of course, this does not take into account the
positive impact of mitigating measures and the overall impact of the change in the environment which has happened, and is still happening, in the context of NDX. The Company does not anticipate any material impact on capital.


Source:
The Trinidad and Tobago Stock Exchange Limited
Thursday April 18, 2013