JMMB prepares to take US$250m Caribbean sustainability bond to market

JMMB Securities plans to court international investors for a US$250-million Caribbean sustainability bond to back pooled climate and development projects.

The bond will be issued by Caribbean Sustainability Investments Limited (CSIL), with the CARICOM Development Fund as project sponsor and JMMB Securities as lead arranger and broker. Proceeds are expected to support renewable energy, resilient infrastructure, water and wastewater systems, food security, affordable resilient housing, healthcare and climate-adaptation projects.

Karl Townsend, chief country officer for JMMB Group Jamaica’s capital markets unit, said the structure seeks to address a central problem confronting Caribbean projects: many are too small individually to attract international investors seeking to deploy large pools of capital.

“Instead of fragmentation, we create scale,” Townsend said, describing an approach that brings eligible projects together under a single regional financing framework. The strategy is intended to give smaller projects collective heft while opening the financing platform to development institutions and global impact investors.

JMMB is targeting development finance institutions and multilateral development banks, including the Caribbean Development Bank, the International Finance Corporation and the Inter-American Development Bank, alongside impact investors in Germany, elsewhere in Europe and the United Kingdom.

The investment house plans to begin its roadshow towards the end of November, with the US$250-million raise targeted for completion by the end of the first quarter of 2027.

“We’ll pound the pavement for as long as it takes to round up the money,” Townsend told the Financial Gleaner. “If we start somewhere towards the back end of November, we are going to be doing our roadshow until we get to that number.”

Two multilateral institutions have already been engaged and are providing feedback on the proposed structure and their investment appetite.

“Once we fine-tune all of those things, then I think we go on the road in a very big way to pin down the commitment to firm up this US$250 million,” Townsend said.

Final terms have not yet been settled, but Townsend said JMMB is seeking “a very long tenor and a very low coupon”.

Meggie Eloy, global technical assistance lead at the Climate Bonds Initiative, which provided technical assistance on the framework, said labelled bonds have tended to attract strong investor demand, although pricing will depend on market conditions, the currency of issuance and other factors.

Projects will also undergo sustainability screening. Eloy said they will be assessed against the Climate Bonds resilience taxonomy, including whether they substantially address the relevant hazard, avoid significant harm to other environmental objectives and guard against maladaptation.

“We do all of those checks and balances to make sure that the investors are actually having the sustainability impact that they say they are having,” she said.

Eloy described the instrument as a regional first because it is designed to finance different types of projects across multiple Caribbean markets.

“It’s the first of its kind in the sense that it’s financing projects across the region, not just in one place and not just focused on one particular asset,” she said.

For Townsend, success would go beyond closing the US$250-million raise.

“Our ambition is not simply to complete one transaction,” he said. “Our ambition is to establish a platform that can help unlock sustainable financing for generations to come.”

neville.graham@gleanerjm.com