RATING DRIVERS

Supporting Factors:

• Leading market position underpinned by strong brand equity, large, high-quality fleet, and superior service levels
• Good growth prospects supported by the relaxation of COVID-19 restrictions and the resultant increase in international activity
• Continued good cost control underpinned by in-house maintenance and repairs and negotiated discounts on purchases based on long-standing relationships

Constraining Factors:

• Financial performance negatively impacted by the COVID-19 pandemic though there was a material rebound recorded in the latter half of 2021 and resultant improvements in debt service coverage
• Need for succession planning
• Corporate governance may improve by the addition of qualified independent directors to the ICR Board
• Refinancing risk applies given the capital-intensive nature and consistent working capital requirements of the Company

Rating Sensitivity Factors: 

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

• An improvement to the ratings of the Government of Jamaica
• A 10% of greater annual increase in car rental income over the next 12-15 months

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

• A deterioration to the ratings of the Government of Jamaica
• Total operating revenue growth slows below 10% over the next 12-15 months
• An 8% or greater rise in total operating expenses
• Failure to satisfy the minimum DSCR requirement
• Inability to refinance or fully repay the J $2.2 billion bond issue at maturity

COMPANY BACKGROUND

Island Car Rentals Limited (ICR or the Company) was incorporated in Jamaica in 1973. The Company is headquartered in New Kingston and has two additional locations at the Norman Manley International Airport in Kingston and the Sangster International Airport in Montego Bay.  In addition to motor vehicle rentals, which is its main line of business, the Company also offers other vehicle and driver services such as private transfers and day trips/tours using either sedans or 14-25-seater buses, as well as executive chauffeur services using luxury sedans and SUVs.

ICR was founded by Mr. Michael Campbell, the Chairman and Managing Director, who owns 70% of the shareholding of the Company, and by his business partner, Mr. Derrick DeMercado, who owns the remaining 30%.  Mr. Campbell is a well-respected member of the Jamaican business community and has wide and varied experience in several industries including real estate, insurance, tourism, and auto rentals.  Mr. DeMercado, who was instrumental in the development of the Company’s operations and policies in its formative years, is retired from the Company and is not actively involved in its operations.

ICR remains the largest ground transportation company in Jamaica with a fleet of approximately 1,442 vehicles as October 2021.  The Company offers a variety of rental options to its clients which include sedans, minivans, light commercial vehicles, and small SUVs, mainly from Toyota, Honda, Hyundai, and Mitsubishi. Over its 48-year history, ICR has established a strong brand that was built around the Company’s reputation for superior service and high asset quality.  This has led to the Company receiving several local, regional, and international awards, culminating in ICR being designated as Jamaica’s Leading Car Rental Company since 2011 and as the Caribbean’s Leading Independent Car Rental Company since 2014, by World Travel Awards. For the year 2020, ICR was awarded a Certificate of Excellence by the international car rental company, Rentalcars.com^[1]. ICR has penetrated many international markets and established supplier relationships with over 300 tour operators and travel agencies worldwide.

^[1] Rentalcars.com is the world’s largest online car rental services company with 7 offices across Manchester, London, Barcelona and Malta.

Analytical Contacts:

Kyla Balwant

Tel: 1-868-627-8879

E-mail: kbalwant@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.

CariCRIS reaffirms its ratings to the J $2.2 billion debt issue of Island Car Rentals Limited

Read More

RATING DRIVERS

Supporting Factors:

• High credit quality of the bond’s underlying assets lends to stable and reliable cash flows for debt servicing
• Comfortable capitalisation reflected in strong capital adequacy ratios despite increasing leverage
• Adequate financial performance with diversity of income and profitable operations
• Moderately diverse investment portfolio with good asset quality
• Stable and growing funding base, though small, adequately supports operations

Constraining Factors:

• Significant sovereign risk exposure compounded by heightened economic uncertainty

Rating Sensitivity Factors

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

• Improvement in the credit rating of the GORTT

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

• Material impairment in any of the underlying securities
• Substantial deterioration in the financial performance and position of DFL
• Downgrade in the rating of the GORTT
• Breaches to any of the bond’s covenants
• Breach of covenants related to other long-term borrowings including limits related to non-performing loans
• A fall in the bond’s security coverage to below 1.0x

COMPANY BACKGROUND

Development Finance Limited (DFL or the Company) is a non-bank financial institution licensed in Trinidad and Tobago (T&T) under the Financial Institutions Act (2008) and is registered with the Deposit Insurance Corporation. The Company was initially established as the Trinidad and Tobago Development Finance Company (TTDFC) in the 1970s. DFL’s shareholders currently comprise primarily of the Government of the Republic of Trinidad and Tobago (GORTT) (49.75%) and the Maritime Financial Group (49.75%), through its subsidiaries, the Maritime General Insurance Company Limited (33.17%) and Maritime Life (Caribbean) Limited (16.58%). The remaining 0.5% is held by DFL Caribbean Holdings Limited.

DFL’s mandate is aimed at providing funding and project structure for all small, medium, or large corporations that are engaged in development activities that can benefit the growth of the T&T economy. From inception in the 1970’s, DFL’s core business was to provide financing for business development to Small and Medium Enterprises (SMEs) locally. Since 2011 the Company has widened its product offering to include Merchant banking and FOREX services in addition to long-term commercial financing options. The Company’s products and services are offered through 6 main business lines which include debt arrangement and underwriting, buying and selling of foreign exchange, deposit-taking for fixed deposits, corporate and commercial lending for various financing needs, provision of guarantees, and letters of credit. DFL’s total assets stood at TT $860.2 million as at December 2021, and its total revenue for the year then ended was TT $23.5 million.

Analytical Contacts:

Musa Abdullah

Tel: 1-868-627-8879 Ext. 233

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.

CariCRIS reaffirms ‘high’ creditworthiness ratings to the bond issue of up to TT $150 million of Development Finance Limited

Read More

RATING DRIVERS

 Supporting Factors:

• Low construction/completion risk supported by a valid Fixed Price Lump Sum Turnkey (LSTK) Contract with Plant Performance Guarantees, though beset by delays in achieving commercial operations
• Reputable and commercially tested technology maximizes the likelihood of a successful operation
• Legally binding supply and offtake agreements in place with a high likelihood of being enhanced with more favourable terms and conditions
• Critical importance of the end products and a changing regulatory and macroeconomic environment underpin favourable demand conditions
• Favourable projected financial performance with adequate debt servicing capacity based on its operational efficiency guarantee output level
• The Owner-Controlled Insurance Program (OCIP) insurance wrap policies serves as an additional layer of protection to the lenders
• Knowledgeable and experienced Board of Directors and Executive Management team, within a good supporting organizational structure

Constraining Factor:

• Vulnerable to the cyclicality of global energy prices

Rating Sensitivity Factors: 

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

• Higher than projected revenues and profits based on favourable selling prices and lower than projected operating costs

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

• Failure to obtain LRT or the inability to obtain approval for a further extension from noteholders by June 30, 2022.
• Unsuccessful start-up of full commercial operations by June 30, 2022 and/or production falling below 2,400 bpd.
• A fall in the Interest Cover to below 2.4 times and/or a drop in the Effective Debt Service Coverage Ratio to below 1.4 times post start-up.

COMPANY BACKGROUND

NiQuan Energy Trinidad Limited (NETL or the company) is a limited liability company incorporated on July 17, 2012, in the Republic of Trinidad and Tobago (T&T). The principal activity of NETL is to complete, commission, and ultimately operate the former World GTL Trinidad and Tobago Limited (WGTL) plant, which when completed, will produce zero sulphur diesel and naphtha via the Gas-to-Liquids (GTL) process^[1]. As at December 2021, NETL’s shareholders comprised of NiQuan Energy, LLC (NQE)^[2]  (75.7%), as well as institutional and individual investors (24.3%).

The WGTL plant was originally designed and developed under a joint venture between the Petroleum Company of Trinidad and Tobago (Petrotrin)^[3] and a private developer.  The WGTL initiative was premised on the notion that a gas-to-liquids plant was required to improve the quality of the diesel and other refined products from the Petrotrin refinery, given the high level of sulphur content and the increasingly stringent regulations arising in the international markets for refined products regarding sulphur levels.  Construction of the plant commenced in 2007 and the cost of construction was estimated to have been of the order of US $135 million.  In 2009 the project fell into bankruptcy because of significant cost overruns, delinquency on the part of the joint venture partner to fund its portion of the project, and failure to meet project deadlines. 

Analytical Contacts:

Musa Abdullah

Tel: 1-868-627-8879 Ext. 233

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

CariCRIS reaffirms ‘good’ creditworthiness ratings for NiQuan Energy Trinidad Limited

Read More

RATING DRIVERS

 Supporting Factors:

• Leading independent renewable power producer in Jamaica with business operations supported by long-term contracts
• Good operating efficiency supported by well-maintained wind turbines
• Solid track record of profitability and above-average return metrics
• Healthy liquidity and strong debt servicing capability supported by strong cash flows from operations
• Satisfactory corporate governance structure and robust risk management practices

Constraining Factors:

• Revenue highly susceptible to the vagaries of nature and wind variability
• Lack of government support and protective legislation for local renewable energy producers

Rating Sensitivity Factors

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

• Successful diversification by the Company into other renewable sources of energy or geographical markets, thereby boosting revenue stability and/or expansion
• Improved operating efficiency, with capacity and availability metrics consistently meeting targets

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

• Breach of any of the debt covenants
• Failure to satisfy any of the performance requirements of the Power Purchase Agreements

COMPANY BACKGROUND

Wigton Windfarm Limited (‘Wigton’ or the Company) is a wind energy facility that was established in April 2000 under the Jamaican Companies Act. The Company was established as a wholly owned subsidiary of the Petroleum Corporation of Jamaica (PCJ), a statutory entity created by the Petroleum Act that was initially mandated to explore and develop Jamaica’s petroleum resources. In 1995, PCJ’s mandate was expanded to include the development of indigenous renewable energy resources and be the main entity in the implementation of Jamaica’s 2009-2030 National Energy Policy. The Government of Jamaica (GoJ) divested Wigton via an initial public offering (IPO) on the Jamaica Stock Exchange (JSE) which was successfully completed in May 2019. Wigton’s shareholders are diversified among institutional and private shareholders. As at June 2021, Wigton’s top 3 shareholders were Mayberry Jamaican Equities Limited (10%), Victoria Mutual Building Society (9.6%) and the National Insurance Fund (6.4%). As at November 10, 2021, Wigton ‘s market capitalization stood at approximately J $5.5 billion^[1].

Analytical Contacts:

Nadia Sanchez

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

E-mail: nsanchez@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.

CariCRIS assigns ‘adequate’ creditworthiness ratings to the proposed bond issue of up to J $5.8 billion of Wigton Windfarm Limited

Read More