PriceSmart Seeks $65 Million Amid Trinidad Forex Challenges

In response to a challenging foreign exchange environment, PriceSmart’s operations in Trinidad are seeking up to US$65 million through Jamaican capital markets and local banks. This funding will support the construction of a new distribution center and address outstanding payables. According to the company’s third-quarter report, PSMT Trinidad/Tobago Limited has engaged GK Capital Management in Jamaica for a US$16 million bond, which will be issued in Jamaican dollars and linked to the US dollar. There is also potential for an additional US$13.5 million in bonds at a 7.25% interest rate over four years. PSMT TT plans to secure the bond with collateral and allocate funds to a sinking fund managed by GK Capital. Furthermore, another subsidiary is set to enter a four-year syndicated loan of US$20.5 million, divided between US and Jamaican dollars, also at a 7.25% interest rate. Additionally, a US$15 million term loan is arranged, repayable in T&T dollars with an interest rate of 11.5%. The financing is aimed at enhancing US dollar liquidity for operational needs amidst ongoing forex challenges, with significant borrowing of US$23 million from 2021 to 2025. PriceSmart has faced forex access issues in Trinidad, evidenced by a decline in convertibility of T&T dollar-denominated cash and investments. With four clubs in Trinidad and recent renovations in Port of Spain, PriceSmart is also planning new distribution centers in Guatemala, Trinidad, and the Dominican Republic for the upcoming fiscal year.