By: Staff Writer
January 22, 2021
A US based financier said that land developments in the Caribbean and Central America are only going to go up as he projects a “hot” Dominican Republic for 2021.
Kevin Wolfer, chief executive officer for Kennedy Funding, told Caribbean Magazine Plus that: “Our feeling is that although COVID-19 may continue shutting things down for the next six months, until maybe late this summer, we think that the market in the Caribbean, and Central America, and land developments are only going to go up.”
He added: “First of all there is pent up demand, where people want to travel. But also there many people who have wanted to start developments and have done nothing in the last year due to COVID-19 and we think that is going to increase values.”
Kennedy Funding has just recently closed a loan for a $1.4m development in Jamaica for P&L Holdings Ltd for the latter company to purchase raw land in Milk River, Clarendon Parish.
While not disclosing what the project was, Mr Wolfer did say that there primary focus is on closing land deals and providing funding for land acquisition once there are not income generating properties on the land and the land does not have any liens against it from another financial institution.
Mr Wolfer also said: “We were happy to make loans in Jamaica, we’ve made loans in the Dominican Republic as well. Presently, we have loans in the Belize and Brazil and in St Thomas and St Croix and, and all over the Caribbean, and we’re happy to do it.”
Mr Wolfer did disclose to us however that Kennedy’s default rate is pretty high, running at about 25 percent of the loans he has closed he may have to foreclose on. But this has not deterred his efforts in the region as he told us that this only means that 75 percent of his loans are performing well. And for not being a traditional bank, this is “pretty good,” he said.
The S&P reported in June, 2020 during the onset of the COVID-19 pandemic that there was $1.2tr in the Us leveraged loan market, but there was only $10.54bn in defaults for that period.
The S&P said: “The $1.2 trillion U.S. leveraged loan market saw another $10.54 billion of defaults in May, the busiest month, by volume, for this activity since 2014. Following a record number of defaults in April, May crossed additional milestones: The 2.85% historical default average was breached for the first time in more than five years, and the Retail sector once again climbed to record highs.
In the broader S&P/LSTA Leveraged Loan Index, the default rate by issuer count, at 3.29%, is now at its highest level since September 2010. By amount, the rate climbed to 3.14%, from 2.32% in April and 1.39% at the end of 2019.
Mr Wolfer said however that he doesn’t care if the person lives in Jamaica, the Dominican Republic or the USA, he will help people to fund their dreams.
He added: “As long as they have a smartphone or a computer, we will get to them.”
He also went on about how the COVID-19 has opened up a lot of opportunities for persons to communicate and do business over distance that they never would have tried had not the pandemic hit.
He said: “So many companies have learned to work remotely and not have to go back to their offices and more and more people are going to want to live in different locations, whether that be in Florida, or in the Caribbean, and we think it’s going to create more demand in the Caribbean.”
The “hot islands” Mr Wolfer said to watch out for is the Dominican Republic as he forecasts that the country is going to do “really well” in 2021 and there is going to be a lot of investments happening in the DR.