There is an old maxim in creditor negotiations: it’s never just about numbers — it’s also about leverage. In the case of Michael Lee-Chin’s Portland holdings and their bondholders, both sides now believe they hold the stronger hand. Yet the truth is messier: control of the keys to the kingdom — Lee-Chin’s stake in NCB Financial Group (NCBFG) — has become both the collateral underpinning the debt and the potential fulcrum that can reallocate power in a single, large move.
This is the story of how a complex web of pledges, delayed payments, and public bondholder meetings has escalated into one of the Caribbean’s most closely watched creditor showdowns — and why the value of the collateral, not just the nominal debt, will decide who really holds the leverage.
A quick timeline of the build-up
• Multiple bond tranches across related issuers. Over recent years several debt instruments linked to companies controlled by Lee-Chin — including Portland (Barbados) Ltd and other related issuers — have come under strain. Meetings called to deal with missed or delayed payments were pushed and postponed in mid-2025.
• Bondholder meetings and renewed urgency. By mid-2025 noteholders convened (or prepared to convene) meetings to decide on bond restructurings and extensions; in some cases bondholders were described as militant and unwilling to accept further extensions. Recent reporting shows noteholders were being asked to decide on proposals covering more than US$300m of connected indebtedness.
• NCB shares as collateral. A crucial wrinkle: many of these notes are collateralised by Lee-Chin’s shares in NCBFG — estimates in regulatory filings and market reporting suggest approximately 1.06 billion NCB shares have been used as security across a range of instruments. That collateral package is the single most important asset underpinning multiple bond tranches.
What bondholders think — and what they might be missing
Bondholders have reasons to be militant. Missed or late coupon and principal payments are real, and in small markets patience can run thin. Several meetings called for votes on restructuring proposals and extensions; press coverage captured the tenor of those meetings and the readiness of noteholders to push back.
But insisting on immediate, uncompromising outcomes is not costless. When a bond is secured by a concentrated block of equity — especially equity held by a single controlling shareholder — the creditor’s bargaining position depends heavily on two things: (a) the market value of the pledged shares at realizable prices, and (b) the legal and practical ease with which collateral can be enforced and liquidated across jurisdictions. If enforced sale would push the share price lower — or if the pledged block exceeds what the market can absorb — the creditor may find its paper claim difficult to convert into cash without destroying value. This dynamic is the key worry behind talk of “haircuts” and painful enforcement scenarios.
The collateral paradox: control vs. value
A recurring theme in coverage is the paradoxical position of Michael Lee-Chin: he still appears to control a commanding stake in NCBFG, yet much of that holding has been pledged to secure debt. That makes headlines because it opens the theoretical pathway for a creditor to seize a block of shares large enough to threaten control. But the reality is not binary.
Recent public reporting and regulatory materials show that while a very large number of NCB shares are pledged (c. 1.06 billion across related notes), the market value and liquidity of those shares — what a forced sale would actually fetch — is much less certain. Enforcement that forces chronic selling pressure could sharply depress prices and leave bondholders holding substantially less than the face value of their claims. Conversely, if the pledged shares are already worth less than the sums they secure, bondholders have less room to insist on uncompromising outcomes; their collateral is not a clean, full-value buffer. Several market reports and memoranda referenced in local coverage highlight exactly this tension.
Lee-Chin’s defensive moves (and why they matter)
From public filings and market activity one can see several moves consistent with a defensive strategy: sale of minority parcels of shares to generate liquidity, negotiating. There is also a broader strategy unfolding at NCBFG itself: the bank completed a large issue of senior secured notes in mid-2025 to shore up funding and provide capacity for strategic manoeuvres. That transaction — and the wider capital markets activity — must be read alongside the bondholder negotiations: a well-timed capital raise or new note issuance can change incentives for both stakeholders and bondholders.
The wider stakes: control of a regional banking champion
NCBFG is not just another listed company. It is the Caribbean’s largest bank by several metrics and an anchor of the region’s financial infrastructure. Loss of a controlling stake — or even the public perception that control is fragile — has real systemic and reputational implications. Regulators, counterparties and large institutional shareholders will all watch any transaction involving pledged blocks carefully. That fact constrains both sides: bondholders cannot easily seize control without a messy market fallout, and the controlling shareholder cannot simply ignore obligations without risking forced remedies.
What a “haircut” would look like — and why it may be unlikely
A haircut — an outright reduction in principal or coupon paid to bondholders — is politically and commercially painful. Bondholders typically resist it. Yet it is sometimes the economically rational outcome if enforcement (selling pledged shares) would drive market prices down so far that liquidation proceeds would be insufficient to cover claims. Put bluntly: if the pledged NCB shares are worth less than the debts they secure, haircuts become a negotiation lever for bondholders who prefer some recovery now over the risk of a worse recovery through forced sale.
However, recent reporting suggests the reality is mixed: some analysts and memos indicate that the realizable collateral value may in fact be less than the outstanding debt in some cases, which would reduce bondholders’ room to demand full payment without restructuring. That dynamic flips the leverage back to the borrower — but only if the borrower can credibly show solvency prospects or real restructuring plans that avoid enforced liquidation.
Why Lee-Chin’s public position feels paradoxical
The user framing — that Lee-Chin “maintains his waning clutch on NCB only because of the gross underperformance of the banking group’s stocks” — captures a political truth: a depressed share price makes it both easier and harder for him to manage the situation. Easier because there is less immediate counter-voting pressure from the market; harder because low prices make pledged shares less valuable and reduce options for financing through equity sales. Recent sales of NCB shares by AIC/Portland affiliates (reported in local press) show Lee-Chin has been selling some shares to generate liquidity, but those sales also reduce his unencumbered stake.
The legal and cross-jurisdictional complexity
Some of the notes and issuers involved are Barbadian or Trinidadian entities while the collateral is shares in a Jamaican-listed bank; enforcement therefore runs into cross-border insolvency, securities transfer mechanics and local corporate governance rules. That complexity slows down quick remedies and increases the value of negotiated outcomes — a reason why bondholders may, despite militancy, find themselves returning to the table. Coverage of postponed meetings and requests for extensions underscores the practical difficulties both sides face.
What to watch next
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Noteholder votes and acceptance levels. Reports show major votes are impending or scheduled that will decide restructuring proposals; the thresholds for acceptance and the votes of large institutional holders will be key.
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NCBFG asset pledges disclosure & any lock-up agreements. Any subsequent filing clarifying the scale and enforceability of share pledges will reframe market expectations.
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Share sales by AIC/Portland affiliates. Continued selective disposals are likely — watch volumes and price impact on the Jamaica Stock Exchange.
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Regulatory signals. Central banks and securities regulators in Jamaica and neighbouring jurisdictions may intervene or comment if contagion risks rise.
Businessuite Bottom line: leverage is not just legal title — it’s realizable value
At first glance, a large pledged block of NCB shares looks like a bondholder’s ace. But leverage rests on what a creditor can actually turn into cash without collapsing prices or running afoul of cross-border rules. Both sides — militant bondholders and a defensive controlling shareholder — are playing a high-stakes game in which the true arbiter will be price discovery, regulatory tolerance for forced execution, and the willingness of both sides to negotiate a managed restructuring rather than risk mutually destructive enforcement.
For bondholders who believe they “hold the handle,” the hard reality is that the handle turns only if the market will take the payload. If it will not, then the talk of haircuts and ultimatums quickly becomes a bargaining position — and the eventual outcome will likely be a negotiated compromise structured to preserve value, not destroy it.
Selected sources & further reading: Jamaica Observer (noteholder decisions), Stabroek News (noteholder votes on US$364M), Jamaica Gleaner (bondholder meetings postponed), Our.Today and regionals on pledged NCB shares and sales, NCBFG investor notices on bond issuances.
