NCB Fi­nan­cial Group Ltd (NCBFG), which is chaired Ja­maica-born in­vestor, Michael Lee-Chin, is ex­pect­ed to come un­der in­creased pres­sure in 2026 due to high­er in­ter­est costs as­so­ci­at­ed with its Ju­ly 2025 US$225 mil­lion in­ter­na­tion­al bond and up­com­ing debt re­fi­nanc­ing rounds.

The Kingston Ja­maica-head­quar­tered fi­nan­cial group's in­ter­na­tion­al bond is se­cured by its 61.77 per cent stake in West­moor­ings-based Guardian Hold­ings Ltd (GHL).

Lee-Chin al­so faces a dead­line of the end of 2025 to make good on some of the prin­ci­pal of US$297 mil­lion he owes note­hold­ers of three com­pa­nies he has an in­ter­est in: Port­land (Bar­ba­dos) Ltd (PBL), AIC (Bar­ba­dos), and Spe­cial­ty Cof­fee In­vest­ment Com­pa­ny (SCI). At a meet­ing last week Wednes­day in Kingston, a ne­go­ti­at­ing com­mit­tee pro­posed a new re­struc­tur­ing plan to the note­hold­ers that would grant Lee-Chin’s three af­fil­i­at­ed com­pa­nies a fi­nal op­por­tu­ni­ty to reg­u­larise more than US$297 mil­lion in out­stand­ing debt.

De­tails of that pro­pos­al in­clud­ed that the three com­pa­nies must re­mit US$94.1 mil­lion to the trustee, JCSD Trustee Ser­vices Lim­it­ed, on or be­fore De­cem­ber 31.

On the is­sue of NCBFG, the com­pa­ny main­tains a di­ver­si­fied re­gion­al foot­print, own­ing 100 per cent of NCB Ja­maica (NCBJ), Ja­maica’s largest com­mer­cial bank by as­sets; 50.20 per cent of Bermu­da-based Clar­ien Group Lim­it­ed; and the 61.77 per cent of GHL, which ranks among the re­gion’s largest in­sur­ance groups.

For its 2025 fi­nan­cial year, NCBFG re­port­ed a net prof­it of J$36.91 bil­lion (US$229.28 mil­lion), rep­re­sent­ing a 71 per cent in­crease over the J$21.57 bil­lion record­ed in Sep­tem­ber 2024. With­out the one-off gain of J$15.12 bil­lion aris­ing from the sale of Nether­lands- based in­sur­ance bro­ker Thoma Ex­ploitatie B.V, the in­crease in prof­it would have been neg­li­gi­ble.

Div­i­dend pay­ments dur­ing 2025 were mixed. The group de­clared three div­i­dends of J$0.50 each, but omit­ted its cus­tom­ary Feb­ru­ary pay­ment. Cash up­stream­ing from sub­sidiaries con­tin­ues to be a cen­tral pil­lar of NCBFG’s dis­tri­b­u­tion ca­pac­i­ty. In 2024, NCBJ re­mit­ted US$80 mil­lion in div­i­dends, while GHL con­tributed US$17 mil­lion. NCBFG record­ed US$95.9 mil­lion in div­i­dend in­come for 2024 and paid J$4.9 bil­lion (US$31 mil­lion) to its own share­hold­ers—un­der­scor­ing the im­por­tance of NCBJ and GHL to the hold­ing com­pa­ny’s liq­uid­i­ty.

The near-term out­look for NCBFG, and all oth­er fi­nan­cial in­sti­tu­tions in Ja­maica, has be­come more chal­leng­ing in the wake of Hur­ri­cane Melis­sa, which se­vere­ly dis­rupt­ed eco­nom­ic ac­tiv­i­ty. The Plan­ning In­sti­tute of Ja­maica (PI­OJ) is pro­ject­ing an eco­nom­ic con­trac­tion of 11 to 13 per cent, re­flect­ing ex­ten­sive dam­age to in­fra­struc­ture across sev­en parish­es, which cur­tailed com­merce and in­ter­rupt­ed the win­ter tourism sea­son.

In re­sponse to the height­ened un­cer­tain­ty, Fitch Rat­ings placed both NCBFG and NCBJ on Rat­ing Watch Neg­a­tive, in­di­cat­ing the pos­si­bil­i­ty of a down­grade in 2026 de­pend­ing on the pace of re­cov­ery and the ex­tent of bal­ance-sheet pres­sures.

Re­gion­al rat­ing agency Cari­CRIS’ most re­cent re­ports on NCBFG and NCBJ—pre­pared pri­or to the hur­ri­cane—high­light­ed a num­ber of emerg­ing con­cerns. NCBJ’s non-per­form­ing loan (NPL) ra­tio de­te­ri­o­rat­ed from 3.2 per cent in Sep­tem­ber 2024 to 3.6 per cent in March 2025, dri­ven by high­er pro­vi­sion­ing on its un­se­cured loan port­fo­lio.

Op­er­a­tional loss­es al­so in­creased due to a sys­tem con­fig­u­ra­tion is­sue re­lat­ed to Visa Deb­it es­ti­ma­tion trans­ac­tions, which the agency ex­pects will not re­cur. Net prof­it for the six months to March 2025 fell 27 per cent to J$2.76 bil­lion, with Cari­CRIS cau­tion­ing that prof­itabil­i­ty in 2026 would like­ly be con­strained by high­er op­er­at­ing ex­pens­es linked to strate­gic project im­ple­men­ta­tion.

Cari­CRIS has at­trib­uted rough­ly J$1.5 bil­lion (US$9.4 mil­lion) in ex­tra in­ter­est costs at the Group to the US$225 mil­lion in­ter­na­tion­al bond. The agency point­ed out that about J$64 bil­lion (US$397.52 mil­lion) in debt is sched­uled to ma­ture with­in the next 12 to 15 months across the con­glom­er­ate. The lat­est au­dit­ed re­sults for NCBFG con­firm that J$61.5 bil­lion falls due at the Group lev­el over the next year, with J$33.6 bil­lion ma­tur­ing for the par­ent com­pa­ny alone.

To buffer any po­ten­tial liq­uid­i­ty gaps, the rat­ing agency not­ed that the NCBFG has ac­cess to as much as J$4 bil­lion and US$45 mil­lion in con­tin­gency fund­ing. The dis­clo­sure fol­lows two re­fi­nanc­ing ex­er­cis­es in Sep­tem­ber, dur­ing which NCBFG sought to roll over US$88.9 mil­lion at nine per cent, and J$6 bil­lion at 11 per cent—an in­di­ca­tion of the high­er cost of cap­i­tal now con­fronting the in­sti­tu­tion.

While NCBJ ac­counts for 53 per cent of NCBFG’s con­sol­i­dat­ed as­set base, GHL con­tributes ap­prox­i­mate­ly 60 per cent of group prof­itabil­i­ty. The full im­pact of hur­ri­cane-re­lat­ed dis­rup­tions on NCBJ’s loan port­fo­lio re­mains un­cer­tain, but fur­ther pro­vi­sion­ing is an­tic­i­pat­ed in up­com­ing NCBFG fi­nan­cials.

GHL’s ac­qui­si­tion of the pen­sion fund man­age­ment port­fo­lio of NCB In­sur­ance Agency & Fund Man­age­ment for TT$157 mil­lion (about US$23.2 mil­lion) in Sep­tem­ber is ex­pect­ed to pro­vide some sup­port to fu­ture div­i­dend flows.

Nonethe­less, NCBFG must al­so make pro­vi­sion for the planned ac­qui­si­tion of Port­land Pri­vate Eq­ui­ty Ltd’s 17.92 per cent stake in Clar­ien Group. That es­ti­mat­ed US$20 mil­lion trans­ac­tion has not yet been fi­nalised, and Cari­CRIS not­ed that the group still has to de­ter­mine the spe­cif­ic fi­nanc­ing mech­a­nism for the pur­chase. Michael Lee-Chin is the chair­man of both NCBFG and Port­land Pri­vate Eq­ui­ty. The oth­er part­ner in Port­land Pri­vate Eq­ui­ty is Robert Almei­da, who is the CEO of NCBFG.

Note­hold­ers push back

Note­hold­ers are de­ter­min­ing whether or not to ap­prove a new re­struc­tur­ing pro­pos­al that would grant Michael Lee-Chin’s three af­fil­i­at­ed com­pa­nies a fi­nal op­por­tu­ni­ty to reg­u­larise more than US$300 mil­lion in out­stand­ing debt.

Should the ini­tial pay­ment of US$94.1 mil­lion be made, the com­pa­nies would then be re­quired to meet a de­fined se­ries of in­ter­est pay­ments over the next two years be­fore pay­ing all re­main­ing prin­ci­pal and in­ter­est by De­cem­ber 31, 2027. In­ter­est due up to June 30, 2026 must be set­tled by Sep­tem­ber 15, 2026, while in­ter­est due to June 30, 2027 must be paid by Sep­tem­ber 15, 2027.

The mech­a­nism for deal­ing with non-pay­ment has al­so been strength­ened. Un­der the pro­posed terms, a fail­ure to meet any of the statu­to­ry dead­lines oblig­es the trustee to is­sue a no­tice of ac­cel­er­a­tion with­in 45 days of the missed pay­ment. Once is­sued, all prin­ci­pal and in­ter­est be­come im­me­di­ate­ly due, with de­fault in­ter­est ac­cru­ing from the day af­ter the breach. If the ac­cel­er­at­ed amounts re­main un­paid dur­ing the cure pe­ri­od, the trustee must pro­ceed to en­force­ment as di­rect­ed by an en­force­ment res­o­lu­tion of the note­hold­ers.

In prac­ti­cal terms, en­force­ment would in­volve seiz­ing the pledged col­lat­er­al: 1.024 bil­lion NCB Fi­nan­cial Group (NCBFG) or­di­nary shares, equiv­a­lent to ap­prox­i­mate­ly two-fifths of the Ja­maican con­glom­er­ate.

“In the past, the promis­es to pay had no con­fi­dence if they were not met. In fact, it was a large part of many dif­fer­ent meet­ings and dif­fer­ent groups and so on. What the bond­hold­ers have done is by cre­at­ing this com­mit­tee, every­thing has been gath­ered in­to one ne­go­ti­at­ing group,” said Christo­pher Za­c­ca, chair­man of the ne­go­ti­at­ing com­mit­tee, and CEO of Sagi­cor Group Ja­maica.

The com­mit­tee—es­tab­lished to ne­go­ti­ate a uni­fied po­si­tion be­tween the is­suer and 14 dis­tinct note­hold­er groups—in­cludes ex­ec­u­tives from Ja­maica’s fi­nan­cial sec­tor. That group con­vened nine times, three of which in­volved Lee-Chin and his ad­vis­ers.

A Ja­maica Ob­serv­er re­port last Fri­day high­light­ed that the bro­kers on the ne­go­ti­at­ing com­mit­tee ac­count for more than 50 per cent of the out­stand­ing debt by val­ue. That, how­ev­er, falls short of the 75 per cent su­per­ma­jor­i­ty re­quired to ap­prove a bind­ing res­o­lu­tion un­der the trust deeds. The mul­ti­plic­i­ty of in­vestor group­ings—and vis­i­ble ex­pres­sions of dis­sat­is­fac­tion—adds com­plex­i­ty to the ap­proval process.

Sev­er­al tranch­es of bonds have ma­tured over the last three years, with some in­vestors still await­ing over­due in­ter­est. Both AIC (Bar­ba­dos) and PBL were cit­ed for un­paid prin­ci­pal and in­ter­est on spe­cif­ic is­suances. One in­vestor, post­ing dur­ing a re­cent call, not­ed that they re­quired their ma­tured funds to “han­dle med­ical treat­ments.”

“Pa­tience is wear­ing thin at this time,” an­oth­er note­hold­er re­marked, re­flect­ing frus­tra­tion with the flow of in­for­ma­tion and de­lays in re­ceiv­ing pay­ments.

If note­hold­ers con­sent to the new pro­pos­al, in­ter­est would re­vert to the orig­i­nal con­trac­tu­al rate—with no de­fault in­ter­est ap­plied. Thus, an in­vestor who had been re­ceiv­ing 10.50 per cent in­clud­ing a 2.00 per cent de­fault pre­mi­um would re­turn to 8.50 per cent. Ap­proval would al­so for­malise for­bear­ance on ac­cel­er­a­tion and en­force­ment for ex­ist­ing events of de­fault.

Ac­cord­ing to Za­c­ca, note­hold­ers re­ject­ed the is­suer’s Ju­ly–Au­gust pro­pos­al, with on­ly sev­en groups achiev­ing the 50 per cent in­ter­nal ma­jor­i­ty re­quired to form the ne­go­ti­at­ing com­mit­tee. One group vot­ed 63 per cent against that pro­pos­al, which sought for­bear­ance on col­lat­er­al cov­er­age, a fur­ther prin­ci­pal de­fer­ral, and a new fi­nal ma­tu­ri­ty date of De­cem­ber 2027 for out­stand­ing in­ter­est.

“We don't want to get there. We ex­pect that for Mr. Lee-Chin to promise to pay US$95 mil­lion by De­cem­ber 31 that he's go­ing to pay it to start,” Za­c­ca said, ref­er­enc­ing the pos­si­bil­i­ty—un­de­sired by the com­mit­tee—of mov­ing against the pledged NCBFG shares.

One struc­tur­al safe­guard built in­to the new pro­pos­al is that no ex­cess NCBFG shares can be re­leased un­til the en­tire in­debt­ed­ness has been sat­is­fied. Even if the US$94.1 mil­lion pay­ment is made, the arrange­ment pre­vents any shares from be­ing re­turned to Lee-Chin’s con­trol. In­stead, ex­cess shares can be re­as­signed to trust deeds that are un­der-col­lat­er­alised. The col­lat­er­al ra­tio, based on NCBFG’s clos­ing share price last week Wednes­day, stands at ap­prox­i­mate­ly 1.13 times.

The scale of the debt chal­lenge is made even clear­er in the Ju­ly 2025 in­ter­na­tion­al bond prospec­tus, which set out in stark terms the ex­tent of Michael Lee-Chin’s grow­ing li­a­bil­i­ties. As at March 2025, he ben­e­fi­cial­ly held 52.15 per cent of NCBFG through sev­er­al con­trolled en­ti­ties, in­clud­ing AIC (Bar­ba­dos), AIC Glob­al Hold­ings Inc., Port­land (Bar­ba­dos) and AIC (Ja­maica) Lim­it­ed.

But the prospec­tus al­so dis­closed that 50.5 per cent of the shares in NCBFG have been pledged as col­lat­er­al for bonds is­sued by com­pa­nies ma­jor­i­ty-owned by Mr. Lee-Chin, in­clud­ing AIC, AIC Glob­al and Port­land Hold­ings Inc.

One of those en­ti­ties, AIC (Ja­maica), bor­rowed J$1 bil­lion from Bari­ta In­vest­ments ear­li­er this year, se­cured against the NCB Tow­ers prop­er­ty in Kingston. In to­tal, near­ly J$4 bil­lion has now been raised against that as­set.

T&T note­hold­ers

This is not the first in­stance of pay­ment strain among Lee-Chin’s en­ti­ties. In May 2024, Port­land Bar­ba­dos Ltd missed a US$23 mil­lion pay­ment, prompt­ing a tem­po­rary event of de­fault by Re­pub­lic Bank Ltd, the trustee. Al­though the bond was lat­er reg­u­larised, PBL had been late on the first two of three sched­uled pay­ments. AIC Bar­ba­dos dis­posed of NCBFG shares in 2024 and an­oth­er 23 mil­lion NCBFG shares in ear­ly 2025—rais­ing rough­ly J$1.08 bil­lion (US$6.7 mil­lion at the time)—to fund oblig­a­tions.

As at Sep­tem­ber 30 2025, AIC Bar­ba­dos held 1.195 bil­lion NCBFG shares, equal to 46.24 per cent of the com­pa­ny. Re­stric­tions on re­leas­ing pledged shares re­duces its abil­i­ty to dis­pose of shares to raise liq­uid­i­ty for up­com­ing pay­ments.

“There will be a num­ber of meet­ings to pass this res­o­lu­tion and any trust deed will re­quire a su­per­ma­jor­i­ty of 75 per cent of the to­tal nom­i­nal val­ue of the bonds. The in­sti­tu­tions will be vot­ing for this, but that doesn’t reach 75 per cent. We’re urg­ing bond­hold­ers to show up in per­son or by proxy to vote in favour of this res­o­lu­tion,” Za­c­ca not­ed.

Meet­ings will take place be­tween De­cem­ber 2 and 11 at the JSE’s head of­fice, ex­cept for the fi­nal meet­ing on the US$100 mil­lion AIC Bar­ba­dos is­suance, which will be held at the Ja­maica Pe­ga­sus Ho­tel. JCSD Gen­er­al Man­ag­er An­drea Kel­ly urged note­hold­ers to sub­mit proxy forms with a J$100 postage stamp to avoid pro­ce­dur­al chal­lenges.

US$1 = J$161