Mortgage Bank to float housing bond, backed by Venezuela
By Ashford W. Meikle
Jamaica
Gleaner
Ocho Rios, St Ann
Petroleumworld.com
09 24 06
The
Jamaica Mortgage Bank (JMB) plans to raise $1 billion
from a housing bond float and other financing arrangements
to fund expansion of its mortgage loan portfolio
under a line of credit it has with the Economic
Development Bank of Venezuela (BANDES).
The
bond was announced by Housing and Transport Minister
Robert Pickersgill at a housing expo in Kingston.
The
terms of the bond were not immediately known. JMB
head Milverton Reynolds was off the island and unavailable
for comment.
"We
have an ambitious goal to raise $1 billion through
the issue of shelter bonds and meaningful alliances
with local partners," said Pickersgill.
Established
35 years ago, the state-run mortgage bank lends
to public and private sector housing developers,
as well as insure private mortgage providers. The
bank, whose asset base grew 10 per cent to $2.78
billion to March 2005, also provides secondary mortgages.
The
entity is profitable but its net earnings plummeted
68 per cent at the end of its 2005 financial year,
the most recently available figures, from $226.7
million to $73.6 million.
Under
the BANDES agreement, the JMB can access up to US$10
million ($660 million) at a concessionary rate for
developers.
The
bank is already a beneficiary of Venezuela's outreach.
Within the US$273 million ($18 billion) loan package
signed mid-August in Montego Bay between Prime Minister
Portia Simpson Miller and President Hugo Chavez,
US$2 million ($132 million) is a housing loan for
JMB.
Pickersgill
said that the recent recommendation for the review
of the mortgage agency's organisational structure
would facilitate "an expansion of the loan
portfolio of the bank, the development of a vibrant
secondary mortgage market and an expansion of the
mortgage insurance product of the bank."
JMB
is projecting financing of $3.7 billion for 2,910
units, this year, almost 50 per cent more than it
disbursed in 2005. Reynolds, said in January that
the projection was largely based on developers'
response to three-point drop in the bank's lending
rates last December, from 21 per cent to 18 per
cent.
Last
year, the government spent some $8.4 billion on
housing benefits for almost 21,000 persons, with
JMB responsible for 1,598 units, representing a
$875 million investment, according to Pickersgill.
Jamaica
Gleaner
September 22, 2006
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