News Release Scotia Group Jamaica Ltd,


On January 14, 2010, the Government of Jamaica launched a Debt Exchange Offer (JDX) as part of a medium term economic programme to create a platform for sustainable economic growth.
In summary, the JDX is an offer to all holders of domestic marketable securities, both USD and JMD for a par exchange with no reduction in principal amount, a reduction in interest rates and an extension in the maturity profile of the debt. The Government is targeting 100% participation from all bond holders and hopes to complete this exercise as a precursor to obtaining multilateral funding support total US$2.4 billion.
The Board of Directors of Scotiabank Group met to discuss and review the impact of accepting the Debt Exchange Offer and, after careful consideration of the risks and benefits associated with participation, the Board has made the decision to fully participate in the Offer.
In commenting on this decision, Bruce Bowen, President and CEO of Scotiabank Group, stated that “the JDX programme represents a significant opportunity for the Government to improve the fiscal imbalance and long term sustainability of the country’s debt dynamics.  Scotiabank, as the largest financial institution and creditor to the Government, felt that full participation in the JDX Offer was prudent and is the best interest of all our stakeholders. The alternatives to the JDX, as indicated by the Minister of Finance, are stark and the Board considered that non-participation the offer could present our stakeholders with possibly worse repercussions. While this transaction represents only a part of the overall medium term economic programme, it is critical that other critical elements of the programme be implemented as soon as possible. Such elements include tax reform, fiscal responsibility, and structural reform, which when combined with the Debt Exchange offer will ensure that the platform for economic growth is sustainable.”
While the transaction will have a negative impact on the net interest income earned by Scotiabank Group in the near future, the impact on equity is projected to be less than 1% and our key capital adequacy ratios will remain significantly above the regulatory requirements after the transaction is completed.