Two T&T-reg­is­tered com­pa­nies ex­tend­ed five US-dol­lar loans to­talling close to US$170 mil­lion (J$26.69 bil­lion) to Ja­maica’s NCB Fi­nan­cial Group (NCBFG) in 2022 and 2023, ac­cord­ing to the fi­nan­cial hold­ing com­pa­ny’s 2023 an­nu­al re­port.

The Ja­maica Ob­serv­er on Jan­u­ary 3, 2024, re­port­ed that NCBFG had J$93.51 bil­lion in oth­er bor­rowed funds/debt on its books as at Sep­tem­ber 30, 2023.

That means the five loans ex­tend­ed by the two T&T com­pa­nies con­sti­tut­ed about 28.5 per cent of NCBFG’s oth­er bor­rowed funds/debt.

NCBFG is list­ed on the stock ex­changes of Ja­maica and T&T, and is the ma­jor­i­ty share­hold­er of one of the re­gion’s largest in­sur­ance com­pa­nies, T&T-head­quar­tered Guardian Hold­ings Ltd (GHL).

The two T&T com­pa­nies are NCB Glob­al Hold­ings, which lent NCBFG, its par­ent com­pa­ny, US$94.97 mil­lion in four un­se­cured loans in March 2022 and March 2023.

And First­Caribbean In­ter­na­tion­al Bank (Trinidad & To­ba­go) Ltd, a whol­ly-owned sub­sidiary of the Cana­di­an Im­pe­r­i­al Bank of Com­merce, lent NCBFG US$75 mil­lion in May 2023.

NCB Glob­al Hold­ings is a com­pa­ny reg­is­tered in T&T. Its reg­is­tered of­fice is sixth floor, New­town Cen­tre on Mar­aval Road in Port-of-Spain, which is the same reg­is­tered of­fice as NCB Mer­chant Bank.

NCB Glob­al Hold­ings is owned by NCBFG and is the com­pa­ny that was grant­ed a li­cence un­der T&T’s For­eign In­vest­ment Act by Fi­nance Min­is­ter Colm Im­bert to ac­quire up to 74,230,750 shares in GHL on April 29, 2019, ac­cord­ing to a news re­lease on that day from the Min­istry of Fi­nance.

Be­fore it ac­quired that block of shares, NCB Glob­al Hold­ings NCBGHL held 69,547,241 shares in GHL, rep­re­sent­ing 29.99 per cent of GHL.

The in­sur­ance com­pa­ny’s 2023 an­nu­al re­port states that NCB Glob­al Hold­ings owns 143,326,379 GHL shares, equal to 61.77 per cent of the com­pa­ny.

Ac­cord­ing to the 2023 NCBFG an­nu­al re­port, two of the four un­se­cured loans ex­tend­ed by NCB Glob­al Hold­ings, to­tal­ing US$35.47 mil­lion, were due in March 2024 and two un­se­cured loans to­tal­ing US$59.5 mil­lion are due in March 2025.

Fol­low­ing are the four NCB Glob­al Hold­ings loans ex­tend­ed to its par­ent NCBFG, which are both con­trolled by Ja­maica-born en­tre­pre­neur Michael Lee-Chin:

• On March 31, 2022, NCB Glob­al Hold­ings ex­tend­ed an un­se­cured loan of US$55 mil­lion to NCB Fi­nan­cial Group. In­ter­est is due and payable on a se­mi-an­nu­al ba­sis cal­cu­lat­ed at a rate of 7.35 per cent per an­num be­gin­ning De­cem­ber 31, 2022. Prin­ci­pal is due and payable at ma­tu­ri­ty on March 31, 2025;

• On March 31, 2023, NCB Glob­al Hold­ings ex­tend­ed an un­se­cured loan of US$10 mil­lion to NCB Fi­nan­cial Group. In­ter­est is due and payable on a se­mi-an­nu­al ba­sis cal­cu­lat­ed at a rate of 8.24 per cent per an­num be­gin­ning De­cem­ber 31, 2023. Prin­ci­pal is due and payable at ma­tu­ri­ty on March 31, 2024;

• On March 27, 2023, NCB Glob­al Hold­ings ex­tend­ed an un­se­cured loan of US$25.47 mil­lion to NCB Fi­nan­cial Group. In­ter­est is due and payable on a se­mi-an­nu­al ba­sis cal­cu­lat­ed at a rate of 8.24 per cent per an­num be­gin­ning De­cem­ber 27, 2023. Prin­ci­pal is due and payable at ma­tu­ri­ty on March 27, 2024;

• On March 27, 2023, NCB Glob­al Hold­ings ex­tend­ed an un­se­cured loan of US$4.5 mil­lion to NCB Fi­nan­cial Group. In­ter­est is due and payable on a se­mi-an­nu­al ba­sis cal­cu­lat­ed at a rate of 9.12 per cent per an­num be­gin­ning De­cem­ber 27, 2023. Prin­ci­pal is due and payable at ma­tu­ri­ty on March 27, 2025.

The fifth loan ex­tend­ed to the NCB Fi­nan­cial Group was se­cured:

• On May 8, 2023, NCB Fi­nan­cial Group Lim­it­ed ac­cessed a se­cured non-re­volv­ing 3-year term loan of US$75 mil­lion from First­Caribbean In­ter­na­tion­al Bank (Trinidad & To­ba­go), and a group of lenders. In­ter­est is due and payable on a se­mi-an­nu­al ba­sis cal­cu­lat­ed at a rate of 8.50% per an­num be­gin­ning No­vem­ber 8, 2023.

Prin­ci­pal is due and payable in two equal bal­loon pay­ments of US$12.5 mil­lion at the end of months 12 and 24 re­spec­tive­ly, the re­main­ing US$50 mil­lion is to be re­paid at the of end of year three on May 8, 2026.

As a com­pa­ny reg­is­tered in T&T, NCB Glob­al Hold­ings is oblig­ed to file re­ports with the coun­try’s Reg­is­trar Gen­er­al’s De­part­ment (Com­pa­nies Reg­istry).

The Com­pa­nies Reg­istry file on NCB Glob­al Hold­ings in­di­cates it has two is­sued shares worth $2.

In one doc­u­ment—which is stamped April 19, 2022, but dat­ed March 31, 2022—NCB Glob­al Hold­ings en­tered in­to a trust deed with First Cit­i­zens Trustee Ser­vices to is­sue US$55 mil­lion.

First Cit­i­zens Trustee Ser­vices “was ap­point­ed as trustee of the bond­hold­ers up­on the trusts es­tab­lished by and sub­ject to the con­di­tions con­tained in the prin­ci­pal se­cu­ri­ty.”

This in­di­cates T&T’s ma­jor­i­ty state-owned bank would have sold off all or most of the US$55 mil­lion bond to lo­cal in­vestors.

That March 31, 2022 doc­u­ment, which is de­scribed as a state­ment of charge, in­di­cates that the col­lat­er­al for the US$55 mil­lion bond was 19,316,600 or­di­nary shares in GHL.

On March 31, 2022, GHL closed at $27.40, which means the col­lat­er­al of­fered by NCB Glob­al Hold­ings was worth $529.27 mil­lion (US$77.96 mil­lion) on that date. That means the col­lat­er­al was worth 41.74 per cent more than the face val­ue of the bond.

On Tues­day, GHL closed at $16.91, which means the col­lat­er­al was worth $326.64 mil­lion (US$48.04 mil­lion). That means the col­lat­er­al was worth 12.65 per cent less than the val­ue of the bond on Tues­day.

An­oth­er US$55M

Ac­cord­ing to the T&T Com­pa­nies Reg­istry, NCB Glob­al Hold­ings cre­at­ed a sep­a­rate state­ment of charge to se­cure the sum of US$55 mil­lion.

That doc­u­ment was al­so dat­ed March 31, 2022 and stamped on April 19, 2022, the same days as the pre­vi­ous arrange­ment.

That doc­u­ment in­di­cat­ed the “agent” for the arrange­ment was NCB Mer­chant Bank.

Al­though both March 31, 2022 trans­ac­tions were for the same sum of mon­ey, US$55 mil­lion, the col­lat­er­al in the NCB Glob­al Hold­ings/NCB Mer­chant Bank arrange­ment was 7,024,200 GHL shares com­pared to the 19,316,600 GHL shares in the NCB Glob­al Hold­ings/First Cit­i­zens Trustee Ser­vices trans­ac­tion.

On March 31, 2022, the col­lat­er­al for the sec­ond US$55 mil­lion trans­ac­tion un­der­tak­en by NCB Glob­al Hold­ings was worth $192.46 mil­lion (US$28.35 mil­lion).

On Tues­day, the 7,024,200 GHL shares held as col­lat­er­al for the sec­ond US$55 mil­lion trans­ac­tion un­der­tak­en by NCB Glob­al Hold­ings was worth $118.77 mil­lion (US$17.49 mil­lion).

In the sec­ond arrange­ment, NCB Glob­al Hold­ings is de­scribed as the char­gor and NCB Mer­chant Bank as the chargee.

Ac­cord­ing to the Com­pa­nies Reg­istry state­ment of charge for the sec­ond US$55 mil­lion trans­ac­tion, un­der the rubric ‘recitals’:

“This charge is sup­ple­men­tal to a loan agree­ment dat­ed of even date here­with (here­inafter re­ferred to as ‘the prin­ci­pal se­cu­ri­ty’) made among the char­gor, As­so­ci­at­ed Brands (In­vest­ments) Ltd, Uni­ver­sal In­vest­ments Ltd and the lenders par­ty there­to from time to time (here­inafter re­ferred to as the ‘lenders’) and the chargee, where­by the chargee was ap­point­ed as agent to the lenders up­on and sub­ject to the con­di­tions con­tained in the prin­ci­pal se­cu­ri­ty.”

A third doc­u­ment from T&T’s Com­pa­nies Reg­istry, ti­tled mem­o­ran­dum of sat­is­fac­tion, in­di­cat­ed that the 7,024,200 GHL shares that were used as col­lat­er­al for the sec­ond arrange­ment for US$55 mil­lion, “have been par­tial­ly sat­is­fied on March 31, 2023, to the ex­tent that 2,894,800 or­di­nary shares in GHL are re­leased from the charge.”

The re­lease of the 2,894,800 GHL shares from the col­lat­er­al charge for the sec­ond US$55 mil­lion arrange­ment left 4,129,400 shares of the T&T in­sur­ance com­pa­ny as col­lat­er­al for the arrange­ment. That ap­pears to leave col­lat­er­al that was worth $69.82 mil­lion (US$10.28 mil­lion) on Tues­day.

That March 31, 2023 doc­u­ment was signed by Patrick Hyl­ton as the then di­rec­tor of NCB Glob­al Hold­ings and An­gus Young as the then au­tho­rised of­fi­cer of NCB Mer­chant Bank.

The Busi­ness Guardian reached out to GHL’s group CEO, Ian Chi­napoo, last Fri­day, ask­ing him to dis­close the ex­tent to which GHL con­tributed fund­ing to NCB Glob­al Hold­ings to on-lend to the NCB Fi­nan­cial Group and whether there was any se­cu­ri­ty on GHL’s fund­ing to NCB Glob­al Hold­ing.

He re­spond­ed: “NCB Glob­al Hold­ings is a 61.7 per cent share­hold­er in GHL. GHL has paid div­i­dends to all share­hold­ers as per pub­lished de­c­la­ra­tions.

“Note fur­ther that GHL has no di­rect in­vest­ment in NCB Glob­al Hold­ings debt. How­ev­er, a sub­sidiary of GHL, GAMISL, has a small US$500,000 trad­ing po­si­tion and mu­tu­al funds man­aged by Guardian’s as­set man­age­ment busi­ness, have in­vest­ed US$3 mil­lion, which rep­re­sents cir­ca one per cent of the to­tal mu­tu­al fund port­fo­lio as­sets.”