Jordan Phosphate exchanges bond issue

15 March 2002

Jordan Phosphate Mines Company (JPMC)has launched a bond exchange issue in order to refinance its $100 million Eurobond, which was issued in 1997 and matures in August. The new three-year issue, which is lead managed by HSBC, is the first of its kind in the Middle East. 'JPMC has been looking at ways to redress payment,' says Simon Putt, assistant director of emerging markets at HSBC, which lead managed the original Eurobond with Amman-based Arab Bank. 'The solution was to buy back bonds from holders and replace them with new notes, which will mature in August 2005. It is the first refinancing arrangement of its kind in the region.'

Some $35 million of the Eurobond has been exchanged so far, and the remainder of the issue will mature as intended in August this year. No target has been set for the new issue, but Putt says up to $50 million of the original bond could be exchanged. The option is also open for new investors to buy into the issue. 'With privatisation imminent, it gives JPMC more money at their disposal for investment, and the opportunity to tidy up their balance sheet. You could almost look at it as a housekeeping exercise.'

Five companies were prequalified in February to advise the government on the privatisation of JPMC. According to Jordan's executive privatisation commission, the government hopes to be in a position to privatise the company by the end of the year (MEED 15:2:02, Industry).

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