Institute of Private Enterprise Development Limited

RATING DRIVERS

Supporting Factors

Long established player with strong brand equity and good market position
History of profitable operations supported by healthy net interest spreads
Good capitalization and liquidity levels
Risk management framework supported by oversight from an independent Board of Directors
Strong macroeconomic prospects for Guyana are expected to support IPED’s growth

Constraining Factors

IPED operates in a single line of business in Guyana which is exposed to climate related risks
Below average asset quality levels

Rating Sensitivity Factors

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

An improvement in the credit risk profile of the Government of Guyana
Improved ROA and ROE > 4.5% and 5.5% respectively sustained for more 2 years
An improvement in Gross NPLs/Gross Loans to < 7.5%

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

A deterioration in the credit risk profile of the Government of Guyana
A deterioration of ROA and ROE < 1.5% and 2% respectively sustained for 2 financial periods
A deterioration in IPED’s Gross NPLs/Gross Loans ratio to > 20%
Written off loans exceeds GY$100 million in any financial year
Deterioration in the Company’s leverage ratio (Debt/TNW) to 2.5 times or more

COMPANY BACKGROUND

The Institute of Private Enterprise Development Limited (IPED or the Company), located in Georgetown, Guyana, commenced operations in 1985. The Company was originally called the Institute of Small Enterprise Development, however, as its operations expanded, the name was changed to IPED in 1991. IPED was founded by Dr. Yesu Persaud and Mr. Wilfred Stoll to reduce unemployment^[1] and improve livelihoods by building sustainable micro and small enterprises. The initial capital of GY$0.5 million for the Company was provided through a grant from the Pan American Development Foundation, with the founders matching this grant with their funds. Additionally, support for start-up operations was also provided by the Foundation for International Training.

IPED is registered as a non-profit, non-governmental organization with its key objectives being the provision of business guidance, technical assistance, training and financing to micro and small businesses which enables them to build sustainable enterprises. The Company provides its range of services to several sectors across Guyana. The Company is recognized as an Institution of National Character^[2]and is therefore tax-exempted.

Analytical Contacts:

Maxwell Gooding

Tel: 1-868-627-8879 Ext. 235

E-mail: mgooding@caricris.com

Keith Hamlet

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

Mobile: 1-868-487-8356

E-mail: khamlet@caricris.com

Website: www.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.

Institute of Private Enterprise Development Limited

CariCRIS assigns ‘adequate’ creditworthiness ratings for Institute of Private Enterprise Development Limited.

RATING DRIVERS

Supporting Factors:

Strategically important entity to the Government of Jamaica (GOJ), the domestic maritime sector and the wider economy
Favourable market position in containerised cargo in Latin America and the Caribbean supported by strategically located ports
Privatization of some aspects of the commercial operations support expansion and modernization initiatives as well as operating efficiency
Rebound in financial performance characterized by an uptick in profitability and adequate debt protection metrics albeit at reduced revenue levels
Legislative framework supports revenue stability and growth
Adequate governance structure and risk management practices

Constraining Factors:

Uncertainties in the global environment may present downside risks to PAJ’s profitability

Rating Sensitivity Factors:

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

An improvement in the credit rating of the sovereign over the next 12-15 months
A significant increase in revenue leading to DSCR rising to 1.5 times for 2 consecutive years

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

Unexpected material changes in the terms and conditions of its concession agreements with its cargo operators due to force majeure that will negatively impact the payment of guaranteed fixed revenue to the Authority
A greater than 10% decline in operating revenue over the next 12-15 months.

COMPANY BACKGROUND

The Port Authority of Jamaica (PAJ or the Authority) is a statutory body that was established by the Port Authority Act of 1972. The Authority is the principal maritime agency of the Government of Jamaica (GOJ) with both regulatory and development responsibilities for Jamaica’s port and port facilities. PAJ reports directly to the Ministry of Economic Growth and Job Creation (MEGJC) and it is a critical agency of the GOJ in the achievement of its Vision 2030 National Development Goal of economic growth and job creation.

In its regulatory role, the Authority monitors and regulates the navigation of all vessels accessing Jamaica’s ports and harbours, including the setting of tariffs on all goods that pass through the public wharves. In addition, as the regulator for Jamaica’s ports and maritime facilities, PAJ provides and regulates compulsory pilotage and tugboat services, provides and maintains all navigational aids including beacons and lighthouses, maintains ship channels to ensure safe access to ports and harbours in Jamaica and serves as a tribunal for wharfage tariffs. The PAJ is also the designated authority with responsibility for ensuring that all of Jamaica’s ports comply with the International Maritime Organization’s (IMO) International Ship and Port Facility and Security (ISPS) code. In its development role, the Authority develops and facilitates investments in seaport and supporting infrastructure. The Authority’s development objectives are aligned with the medium-term strategic priorities of the GOJ. This includes the development of the Business Processing and Outsourcing (BPO) sector as a source of economic growth and job creation. In this regard, the PAJ provides around 1.6 million square feet (sq.ft.) of space for BPO operations across 3 locations: the Montego Bay Free Zone, The Kingston Free Zone^[1] and the Jamaica International Free Zone.

Analytical Contacts:

Jeffrey James

E-mail: jjames@caricris.com

Anelia Oudit

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.

Port Authority of Jamaica

CariCRIS reaffirms ‘adequate creditworthiness’ ratings assigned to the Port Authority of Jamaica (PAJ)

RATING DRIVERS

Supporting Factors:

Moderate industry diversification and good market position in the Group’s three core business portfolios
The Group’s portfolio of complementary businesses promotes cross selling and value chain maximization
Strong cash flows and healthy debt protection metrics continue to drive solid financial performance

Constraining Factors:

Continued weak economic activity in Trinidad & Tobago and Barbados could exert downward pressure on the Group’s profitability
Restrictions on accessing US$ liquidity in the Trinidad and Tobago market continue to negatively impact business operations, although improvements have been noted

Rating Sensitivity Factors:

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

Continued intraregional and extra-regional expansion resulting in an increase in operating revenue by > 15% for 2 consecutive financial periods
An improvement in operating profit margin to > 12.5% for 2 consecutive financial periods
An increase in operating cash flows leading to an improvement in effective DSCR to > 7.5 times for 2 consecutive financial periods

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

A deterioration in operating profit margin to < 5% for 2 consecutive financial periods
A decline in operating cash flows leading to a deterioration in effective DSCR to < 1.2 times for 2 consecutive financial periods

COMPANY BACKGROUND

Massy Holdings Limited (Massy) has its genesis in 1932 when Neal Engineering Company Limited led by Harry Neal, and Massy Limited headed by Charles Massy merged to establish Neal & Massy Engineering Company Limited. In 1958, the company continued its expansion and listed on the Trinidad and Tobago Stock Exchange (TTSE). The Group rebranded in 2014 to form a unified brand and create a common identity. The holding company name was formally changed from Neal & Massy Holdings Limited to Massy Holdings Limited. The Massy Group currently comprises of over 60 companies with a presence in the retail, distribution, automotive, industrial equipment, energy and industrial gas products and supporting services, consumer finance, remittance, reinsurance and real estate industries, in over 15 countries, throughout the Caribbean and including Colombia and the United States of America (USA).

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.

Massy Holdings Limited (Massy)

CariCRIS reaffirms overall ‘high creditworthiness’ ratings for Massy Holdings Limited

Government of the British Virgin Islands

RATING DRIVERS

Strengths

Continued support from the United Kingdom as an Overseas Territory
Income and economic fundamentals create high GDP per capita, though tempered by COVID-19
Dollarization has supported strong economic fundamentals and trade stability
Prudent fiscal policy guided by the PEFM resulting in low debt levels

Weaknesses

Human resource capacity constraints on account of a small population base
Lack of monitoring of the external sector may hinder targeted policymaking

Rating Sensitivity Factors

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

Real GDP growth of at least 5% sustained over the next 2 years
A sustained improvement in visitor arrivals to greater than pre-hurricane levels over the next 2 years
Continued improvement in company incorporations and registrations to greater than 25% above pre-pandemic revenues sustained over 2 years

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

An increase in the total public sector debt to above 40% of GDP
A change in the island’s status as a British overseas territory or a material change in the level of support rendered to the VI from the UK

SOVEREIGN BACKGROUND

The Virgin Islands (VI) is a British Overseas Territory located in the Caribbean. The 150 km² (58 mi²) Territory consists of the main islands of Tortola, Virgin Gorda, Anegada, and Jost Van Dyke, along with over 50 other smaller islands and cays. About 15 of the islands are inhabited. The VI operates as a parliamentary democracy with its own constitution and an elected Head of Government, named the Premier of the VI. Ultimate executive authority in the VI is vested in the Queen of England and is exercised on her behalf by the Governor of the VI. The Governor is appointed by the Queen on the advice of the British Government. Defence and foreign affairs are the responsibility of the United Kingdom (UK).

Analytical Contacts:

Kyla Balwant

Tel: 1-868-627-8879

E-mail: kbalwant@caricris.com

Stefan Fortuné

Tel: 1-868-627-8879 Ext. 228

E-mail sfortune@caricris.com

Website: www.caricris.com

Email: info@caricris.com

Government of the British Virgin Islands

CariCRIS reaffirms ‘high creditworthiness’ issuer credit ratings to the Government of the Virgin Islands

Transjamaican Highway Limited

RATING DRIVERS

Supporting Factors:

35 Year concession agreement supports sustainability of operations
Regulatory framework provides toll tariff adjustment mechanism to support revenue growth
Track record of good operating efficiency
Essential asset for Jamaica which supports prospects for future traffic growth
Improving financial performance supports cash flow adequacy and comfortable debt service coverage

Constraining Factors:

Revenue linked to economic downturns

Rating Sensitivity Factors:

Factors that can 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
Consistent increases in PAT and DSCR over the next 2 to 3 years

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

A deterioration in the credit rating of the sovereign over the next 12-15 months
A deterioration in the DSCR to less than 1.2 times for 2 consecutive periods
A deterioration in the interest coverage ratio lower than 1 time

COMPANY BACKGROUND

Transjamaican Highway Limited (TJH or ‘the Concessionaire’, or the Company) is a limited liability company, incorporated and domiciled in Jamaica to develop, operate and maintain the Highway 2000 East-West toll corridor under a 35-year Concession Agreement that was executed in November 2001 with the National Road Operating and Constructing Company (NROCC or ‘the Grantor’), a state-owned enterprise. In April 2002 NROCC was granted a concession to design, finance, construct, maintain and operate Highway 2000 and levy, collect and retain tolls in respect of that motorway. NROCC delegated its obligation for the East-West corridor to TJH. TJH then contracted Bouygues Jamaica to construct the highway and Jamaica Infrastructure Operator Limited (JIO) to maintain and operate the toll road. In December 2019, 100% of the ownership of TJH was acquired by NROCC. In March 2020, the shares of TJH were listed on the Jamaica Stock Exchange in an initial public offering, thereby creating a new ownership structure with NROCC being the largest shareholder owning 20%, with the 2 other largest shareholders being NCB Capital Markets (Cayman) Limited (7.8%) and Musson Investments Limited (6.1%).

The Highway 2000 project was undertaken by the Government of Jamaica (GOJ) with a view to connecting the major population centres of Jamaica by a comprehensive 230-kilometer (km) highway system. The project, which was officially launched in September 1999, serves to generate economic activity, reduce traffic congestion, and expand tourism activity to the rest of Jamaica. Highway 2000 is the single largest project ever undertaken in the country at a cost of US $1.3 billion and is the first of its kind in the English-speaking Caribbean.

Construction of the highway was split into four phases: 1A, 1B, 2A and 2B. TJH’s concession is for the design, construction, and operation of 49.9 km of motorway along the East-West Corridor that is divided into two routes, T1 and T2. T1 connects Kingston with May Pen via a connection through Spanish Town, while T2 connects Kingston with Portmore. Collectively, these two routes cover 80% of the manufacturing and distribution companies in Jamaica and traverse some of the most densely populated communities in the country. The first toll plaza was opened at Vineyards in 2003 and the fourth at Mineral Heights near May Pen in 2012.

The Toll Authority, established under the Toll Road Act 2002, regulates the operation and maintenance of all toll roads, monitors compliance of concessionaires with the terms and conditions of concession agreements, including changes in tariff rates, and advises the Minister of Economic Growth and Job Creation on matters relating to toll roads in Jamaica.

Analytical Contacts: