Latest Debenture Offer Described as Good Investment

The latest debenture offer by the Ministry of Finance and Planning, has been described by Vice President of Dehring, Bunting and Golding, Mark Walters, as a good investment that should be “fairly well received”. Speaking with JIS News, the Vice President said the instrument, which is being offered at a rate of 24.625 per cent, “compares favourably with a number of other investment options that investors would have”.
He added that although the current rate was lower than the rate on the previous offer of approximately 28 per cent in July this year, investors should take advantage of the offer, as the expectation was for interest rates to continue their downward trend.
“The rate was set by the Ministry of Finance and they would have canvassed the market (to determine) what would have been an acceptable rate,” Mr. Walters said.
He pointed out that one feature of this instrument was that interests are paid quarterly, with the first payment due on January 27, 2004. Partial redemption of 50 per cent of the amount invested is due on April 27, 2005 and the other 50 per cent would be paid at maturity on July 27, 2006.
Mr. Walters said this compared well with the Bank of Jamaica one-year repurchase rate, which offers 24 per cent, but investors would have to hold their investment for one year. Nonetheless, he advises that investors should always pursue “a mixed approach to their investment strategy”.
The Ministry of Finance issued the instrument on the market on October 21 and the subscription period ends on Monday, October 27. The Ministry is making the offer to help finance the Government’s budgetary requirements.
An unlimited amount is being offered on the market and purchases can be made with a minimum of $1,000 and in multiples of $1,000.
“The average saver in Jamaica should be able to take advantage of this,” Mr. Walters said.