PanJam Investments Limited

CariCRIS reaffirms ‘good creditworthiness’ ratings assigned to PanJam Investment Limited

Endeavour Holdings Limited

CariCRIS downgrades its overall ratings for the TT $400 million bond issue of Endeavour Holdings Limited

Endeavour Holdings Limited

RATING DRIVERS

Supporting Factors

Good asset quality and diversified real estate portfolio underpins a strong competitive position
Business operations supported by adequate occupancy levels and tenant retention rate, albeit at a reduced level
Stable financial performance supported by good operating profits, though at a lower level
Loss of rent insurance reduces the risk of lower income from property damage

Constraining Factors

Challenging economic environment could lead to deterioration in EHL’s financial performance
Refinancing Risk applies, given the bond’s structure

Rating Sensitivity Factors

Factors that could, individually or collectively, lead to an improvement in the ratings and/or Outlook include:

An improvement in the ratings of the Government of Trinidad and Tobago
Occupancy levels rising to above 95%

Factors that could, individually or collectively, lead to a lowering of the ratings and/or Outlook include:

A 10% decline in annual rental income
Occupancy levels declining to below 75%
The inability to refinance the bond/balloon payment at a rate below 7.5%
Trade receivables in days outstanding deteriorating to 95 days and over

COMPANY BACKGROUND

Endeavour Holdings Limited (EHL or the Company) is a private commercial real estate holding company incorporated in Trinidad and Tobago (T&T) in 2001. Its majority shareholders, Endeavour ABRA Holdings Limited and Pelican Investment Limited, each owns 50%. As of December 12, 2019, EHL was listed on the Small and Medium Enterprises (SME) stock market of the Trinidad and Tobago Stock Exchange (TTSE). EHL owns 9 commercial properties and caters to the office, retail, and light industrial/warehousing rental segments.

Analytical Contacts:

Musa Abdullah

Tel: 1-868-627-8879 Ext. 223

E-mail: mabdullah@caricris.com

Anelia Oudit

Tel: 1-868-627-8879 Ext. 226

Mobile: 1-868-487-8364

E-mail: aoudit@caricris.com

Website: www.caricris.com

Email: info@caricris.com

Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.

Genaral Accident Insurance Company Jamaica Limited (GENAC)

RATING DRIVERS

Supporting Factors

Long established player with strong brand equity and good market position
Good capital adequacy supported by low risk retention and strong network of reinsurers
Moderately diverse investment portfolio with good returns and good liquidity, notwithstanding the impact of COVID-19
History of profitable operations
Strong Enterprise Risk Management (ERM) framework

Constraining Factor

Sluggish economic conditions could constrain growth

Rating Sensitivity Factors

Factors that could, individually or collectively, lead to an improvement in the Ratings and/or Outlook include:

An improvement in the credit rating of the Government of Jamaica
Sustained growth in PAT by >15% over the next 2 years without adversely impacting capital adequacy and asset quality

Factors that could, individually or collectively, lead to a lowering of the Ratings and/or Outlook include:

A lowering of the credit rating of the Government of Jamaica
A 2-notch deterioration of the credit rating of any of GENAC’s top 4 reinsurers by A.M. Best or Standard and Poor’s Ratings Services
Loss of relationship with any of the Company’s major reinsurers
A deterioration in the Company’s Minimum Capital Test Ratio below 175% sustained for 6 months
A 10% fall in gross premium income for 2 consecutive years

COMPANY BACKGROUND

General Accident, located in Kingston, Jamaica, commenced operations in the 1920s, as agents for global insurer General Accident Fire and Life Assurance Corporation Limited (GAFLAC), headquartered in Perth, Scotland. In 1981, the majority shareholding^[1] of GAFLAC’s agency’s operations was acquired by Musson (Jamaica) Limited (the Musson Group)^[2], after which it was renamed and incorporated as General Accident Insurance Company Jamaica Limited (GENAC or the Company) and became a wholly owned subsidiary of the Musson Group. In 2011, 20% of GENAC’s shares were listed on the Jamaica stock exchange. With the exception of the Musson Group, the 2 largest shareholders as at September 2021 were Mayberry Jamaica Equities Limited and QWI Investments Limited, holding around 3.36% of the aggregate shareholdings of GENAC.

In September 2019, the GENAC Group acquired 55% of the share capital of Motor One Insurance Company Limited in Trinidad and Tobago (T&T) (Motor One) and subsequently raised its shareholding to 65% in June 2020. In October 2020, Motor One was formally renamed General Accident Insurance Company (Trinidad) Limited (GENACTT). In 2019, the Company also incorporated General Accident Insurance Company (Barbados) Limited (GENACBB), a subsidiary of GENAC, and commenced operations in May 2020. GENAC offers a range of general insurance products including motor, property, travel, engineering, bonds, public liability and marine cargo.

As at September 2021, the Company reported total assets of J $9.1 billion and over the last 5 years (2016-2020), its revenue and profit after tax averaged J $8.7 billion and J $346.4 million respectively.

^[1] The minority shareholder was General Accident, Perth.

^[2] The Musson Group is a manufacturing and merchandising group incorporated and domiciled in Jamaica.

Analytical Contacts:

Megan Dass

Tel: 1-868-627-8879 Ext. 239

E-mail: mdass@caricris.com

Keith Hamlet

Tel: 1-868-627-8879 Ext. 244

Cell: 1-868-487-8356

E-mail: khamlet@caricris.com

Website: www.caricris.com

E-mail: info@caricris.com

Genaral Accident Insurance Company Jamaica Limited (GENAC)

CariCRIS assigns “good creditworthiness” credit ratings to General Accident Insurance Company Jamaica Limited

RATING DRIVERS

Supporting Factors

Strong presence in the Belizean commercial banking industry with a wide distribution network
Robust Risk Management framework supported by digital initiatives
Deposit base underpins stable funding costs and liquidity position
Comfortable capitalization reflected in good coverage of total assets
Continued profitable operations
Improved asset quality

Constraining Factors

High exposure to the heavily indebted Belize Government
Financial system impacted by the loss of correspondent relationships with major international banks

Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:

Improvement in the ratings of the Government of Belize
Increase in profitability to the order of 10% per annum over the next 2 years
Improvement in asset quality with a NPL ratio of 2.5% over the next 2 years

Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:

Lowering of the ratings of the Government of Belize
The occurrence of any factors that may contribute to the deterioration of the CAR below the 9% minimum requirement for the Bank sovereign risk profile

COMPANY BACKGROUND

The Belize Bank Limited (BBL or the Bank) was incorporated in Belize in July 1985 and is registered under the Domestic Banks and Financial Institutions Act, 2012. The Bank commenced its operations as Bank of British Honduras in 1903. In 1912, the Bank was purchased by the Royal Bank of Canada who eventually sold its shareholding in 1987 to a group of local investors and was subsequently rebranded as ‘The Belize Bank Limited’ in April 1987.

The Bank’s ultimate parent company, Caribbean Investment Holdings Limited (CIHL or the Company), was incorporated and registered in Belize under the International Business Companies Act, 1990 of Belize as amended by the International Business Companies (Amendment) Act, 1995 of Belize. The Company is currently listed on the Bermuda Stock Exchange.

In March 2021, CIHL acquired the operations of Scotiabank Belize Limited (SBL) following approval from the Central Bank of Belize. SBL was subsequently rebranded as Belize Bank Corporation Limited (BBCL) and will remain a subsidiary of CIHL until BBL and BBCL are merged to form a single entity, which is expected to happen in the first quarter of 2022.

As at June 2021, BBL held the position of the second-largest bank in Belize by assets with a market share of 26.2%, behind the largest bank with a 37.9% share^[1]. BBL has a wide branch network that comprises 11 branches across all districts in Belize and a network of 28 ATMs.

^[1] Atlantic Bank Limited (ABL) is the largest bank in Belize by assets, which stood at BZ $1.6 billion as at June 2021

Analytical Contacts:

Khadine Tavares

Tel: 1-876-618-8800 Ext. 9813

E-mail: ktavares@caricris.com

Keith Hamlet

Tel: 1-868-627-8879 Ext. 229

E-mail: khamlet@caricris.com

Website: www.caricris.com

Email: info@caricris.com

Belize Bank Limited (BBL)

CariCRIS upgrades the credit ratings of the Belize Bank Limited by 2 notches

RATING DRIVERS

Supporting Factors:

Monopoly position as the sole energy transmission and distribution company in Saint Lucia, with continued focus on renewable energy development
Continued good financial performance
Good operating efficiency supported by continued focus on system enhancement and network improvements

Constraining Factor:

Significant risk retention via self-insurance of T&D assets

Rating Sensitivity Factors:

Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:

An improvement in the credit rating of the sovereign over the next 12-15 months
Continued improvements in economic and business conditions over the next 12 months in Saint Lucia, thereby leading to increased electricity sales

Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:

A decline in gross profit margin to 35% or lower
The occurrence of any event risk that may lead to the financial parameters deteriorating beyond the range for the current rating level
A change in the monopoly position afforded by regulation

COMPANY BACKGROUND

Saint Lucia Electricity Services Limited (LUCELEC or the Company) was established on November 9, 1964, as a private limited liability company with the purpose of electricity generation, transmission, and distribution for Saint Lucia. The Company became public on August 22, 1994. The top five shareholders of LUCELEC are Emera (St. Lucia) Limited (20%), First Citizens (20%), National Insurance Corporation (20%), Castries Constituency Council (15.5%) and the Government of Saint Lucia (10.05%).

LUCELEC operates under an exclusive statutory license, under the Electricity Supply Act (ESA) of 1994, which gives the Company the exclusive right to generate electricity from fossil fuels, as well as transmit and distribute electricity to domestic, commercial, and industrial users in Saint Lucia. Inter alia, the Act provides the legal framework for maintaining a targeted Rate of Return on Average Contributed Capital (ROR) which varies annually. The fuel surcharge provision of the Act is the mechanism used for maintaining the ROR. A fuel price adjustment clause was structured to allow all deviations from the established base price of EC $0.2977 per gallon of fuel to be passed on to the consumers.

In December 2015, the ESA was amended to provide for the regulation of the electricity supply service by the National Utilities Regulatory Commission (NURC). The NURC was established following the passing of the National Utilities Regulatory Commission Bill. The Commission is the official authority for the regulation of the water and electricity sectors in Saint Lucia. The NURC is mainly responsible for (i) ensuring the economic regulation of utility supply services, (ii) establishing, approving, monitoring, and reviewing tariff schemes and tariffs, (iii) monitoring and ensuring compliance with standards, (iv) promoting the economic regulation of utility supply services, (v) ensuring the protection of the interest of consumers in relation to the provisions of the utility supply service, (vi) promoting competition and monitoring anti-competitive practices in the utility supply service, and (vii) reporting to and advising the Minister with responsibility for Public Utilities on the economic, financial, legal, technical, environmental and social aspects of the utility supply services sector^[1].

Based on the new regulatory framework^[2], independent power producers (IPPs) may be granted licenses by the NURC to generate electricity from renewable sources. However, LUCELEC maintains the exclusive license to distribute and transmit electricity in Saint Lucia. The Company presently operates two electricity generation facilities – the Cul de Sac Power Station with 10 generators for a total installed capacity of 86.2 megawatts (MW), and the Belle Plaine Power Station with 2 generators for a total installed capacity of 2.2 MW, as well as seven substations throughout the island, linked by a 66-kilovolt (kV) transmission network. In April 2018, LUCELEC completed the construction of a 3 MW solar farm, which generates 7 million kilowatt-hours (kWhs) of electricity per year. This project marked the beginning of LUCELEC’s transition towards electricity being generated from a renewable source rather than solely from diesel.

^[1] Source: National Utilities Regulatory Commission.

^[2] National Utilities Regulatory Commission Act, No. 3 of 2016.

Analytical Contacts:

Megan Dass

Tel: 1-868-627-8879 Ext. 239

E-mail: mdass@caricris.com

Keith Hamlet

Tel: 1-868-627-8879 Ext. 244

Cell: 1-868-487-8356

E-mail: khamlet@caricris.com

Website: www.caricris.com

E-mail: info@caricris.com

Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published/reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/transmitters/distributors of this product.

Saint Lucia Electricity Services Limited (LUCELEC)

CariCRIS reaffirms “adequate creditworthiness” credit ratings to Saint Lucia Electricity Services Limited

RATING DRIVERS

Supporting Factors

The Company operates in an environment that is characterized by a strong institutional framework with effective regulatory oversight
Continued profitable operations
Adequate capitalization, underpinned by growing asset base
Competitive advantage lies in strong affiliation with NCB Financial Group

Constraining Factor

Current market conditions may challenge NCBKY’s profitability

Rating Sensitivity Factors

Factors that could, individually or collectively, lead to an improvement in the ratings and/ or Outlook include:

2 consecutive years of improved profitability as a result of higher income earned from investments and/or loans, thereby contributing to sustained earnings growth of around 10-15%.

Factors that could, individually or collectively lead to a lowering of the ratings and/ or Outlook include:

A decline in investment yield leading to a contraction in the net interest rate spread to below 1% over the next 12 to 15 months.
Gross loans to gross NPLs ratio of above 15% sustained for the next 12 months
Deterioration in the credit rating of NCB Jamaica (the Parent of NCBKY) that could materially impact the extent of support available to NCB

COMPANY BACKGROUND

NCB (Cayman) Limited (NCBKY or the Company) was incorporated in the Cayman Islands on September 23, 1992 as an exempt company and operates under trust and unrestricted Class ‘B’ banking licenses^[1] issued by the Cayman Islands Government. The Company is a wholly-owned subsidiary of National Commercial Bank Jamaica Limited (the Parent company or NCBJ), Jamaica’s largest commercial banking group, and offers banking and trust services from the Cayman Islands to clients in Jamaica and the wider Caribbean. The Company is regulated and supervised by the Cayman Islands Monetary Authority (CIMA).

As a boutique operation, NCBKY has grown to become a highly reputable private banking and wealth management service provider, offering a suite of services to high net worth individuals and corporate entities. The Company’s principal activities consist of the provision of banking and financial services to overseas clients. These products and services include investment advisory and management, wealth management and investment banking solutions, as well as other financial services for individual and institutional investors.

^[1] As at September 2021 the Cayman Islands Monetary Authority (CIMA) listed 98 financial institutions as Class B Banks. – Source: Cayman Islands Monetary Authority – Banking Statistics. “Under the Banks and Trust Companies Law, holders of this license are permitted to carry on banking business anywhere in the world except in the Cayman Islands. Business may be carried on from the Cayman Islands for clients outside the jurisdiction and all management and other functions may be carried on in Cayman. This type of licence will also normally be granted only to a branch or subsidiary of a major international bank.” Source: Guide to Banks and Trust Companies in the Cayman Islands (Appleby)

Analytical Contacts:

Keith Hamlet

Tel: 1-868-627-8879 Ext. 244

Mobile: 1-868-487-8356

E-mail: khamlet@caricris.com

Samuel Raphael

Tel: 1-868-627-8879 Ext. 234

E-mail: sraphael@caricris.com

Website: www.caricris.com

Email: info@caricris.com