The Caribbean Utilities Company (CUC) has closed a US$160 million private placement of senior unsecured notes, which it described as the largest such financing in its history.
The proceeds will fund a capital programme aimed at modernising Grand Cayman’s electricity grid and meeting the island’s growing demand for power.
The notes were placed with institutional investors, with CIBC and Scotiabank acting as joint placement agents in the first such financing CUC has executed, the company said in a statement on 19 August.
CUC said $30m of the transaction will be issued as green notes under its Green Financing Framework, intended to advance the environmental objectives of the company and the Cayman Islands National Energy Policy.
The placement comprises three tranches:
- $70m of 6.09% Senior Unsecured Notes maturing 19 August 2041
- $30m of 6.34% Senior Unsecured Green Notes maturing 19 August 2051
- $60m of 6.24% Senior Unsecured Notes maturing 12 May 2042
The financing is structured as an initial drawdown of $100 million on 19 August and a $60m delayed draw facility available on 12 May 2027.
CUC said the proceeds will be used to repay short-term debt and to fund its multi-year capital investment programme, which is focused on grid modernisation, system resilience, grid hardening and low-carbon transport initiatives.
The investments are intended to strengthen the network against climate-related risks and to meet Grand Cayman’s growing electricity demand, the company said.
CUC said it expected to allocate the proceeds from the green notes to projects in three of the four categories set out in its Green Financing Framework: energy efficiency, climate change adaptation and clean transportation.
The framework was assessed in 2024 by second-party opinion provider Sustainable Fitch, which the company said rated it ‘Excellent’, the highest of its assessment categories.
President and chief executive Richard Hew said: “This transaction represents an important milestone for CUC.
“As the largest private placement in the company’s history and our first financing executed with joint placement agents, it demonstrates the confidence that both existing and new institutional investors have in CUC, our strategy, and the long-term fundamentals of the Cayman Islands economy.”
