CariCRIS reaffirms ‘high creditworthiness’ ratings to the US $76 million or Jamaican Dollar equivalent bond issue by Sagicor Financial Company Limited
Month: July 2022
Sagicor Financial Company Limited
Supreme Ventures Limited (SVL)
CariCRIS reaffirms ‘good creditworthiness’ ratings to Supreme Ventures Limited
Supreme Ventures Limited (SVL)
RATING DRIVERS
Supporting Factors
- Strong brand loyalty and long history as a well-known betting, gaming, and lottery operator in Jamaica
- Legally binding service agreements for reputable and commercially tested technology supports efficient business operations
- Good financial performance characterized by good profitability and sound debt protection metrics
- Regulatory environment supports stable operations
- Sound governance structure and risk management practices
Constraining Factors
- Significant sovereign risk due to its high exposure to the Jamaican economy
Rating Sensitivity Factors:
Factors that could, individually or collectively, lead to an improvement in the ratings and/ or Outlook include:
- Improvement in the GOJ’s credit rating, leading to an improved overall credit risk profile
- An increase in earnings from its Guyana operations to more than 15% of SVL’s annual profits
- Revenue increase by more than 20% per annum for 2 consecutive years
Factors that could, individually or collectively, lead to a lowering of the ratings and/ or Outlook include:
- A deterioration in the GOJ’s credit rating over the next 12-15 months
- A deterioration of SVL’s revenue by more than 25%
COMPANY BACKGROUND
Supreme Ventures Limited (SVL or The Group), is a Jamaican entity formed in 1995 which operates a successful gaming entity that has developed into a broad spectrum of gaming brands and entertainment companies. The Group includes subsidiaries namely, Prime Sports (Jamaica) Limited, PosttoPost Betting Limited, Supreme Ventures Racing & Entertainment Limited (SVREL), Supreme Ventures Services Limited, Supreme Ventures Fintech Limited and Supreme Group Incorporated.
In June 2001, SVL launched its lottery operations employing 28 employees and introduced two out of three games it was licensed to offer, Lucky 5 and CashPot. The third game, Dollaz! came on stream in January 2003. The Group has earned a reputation of being one of the leading and more dynamic companies in Jamaica and acquired 100% of the shareholdings in the Jamaica Lottery Company (JLC) in December 2003. SVL was listed on the Jamaica Stock Exchange in 2006 when its portfolio had grown to include Sports Betting through its JustBet brand and Video Lottery Terminals[1] (VLTs) via its Acropolis Gaming Lounge which commenced in Kingston in July 2005.
In August 2009, Supreme Ventures became the first provider of a mega-million multi-jurisdictional lottery game, Super Lotto, in eight countries in the Caribbean. The Group has earned the title of the premier gaming and entertainment provider in Jamaica and enhanced this reputation in 2017, when it was successful in its bid to become the sole operator of Caymanas Park[2]. With the support from the horseracing industry, SVL began operating Caymanas Park under the company name, Supreme Ventures Racing and Entertainment Limited (SVREL).
Currently, SVL offers 11 lottery games through a network of 1,200 retail stores and 1,500 terminals, JustBet sports betting products as well as the Acropolis Gaming Lounge and employs over 500 persons. SVL derives its revenue from 3 main segments which include lotteries, sports betting[3] and PIN Codes[4]. For the year ended December 2020, the lotteries operations remained SVL’s main source of revenue contributing approximately 69.2% of total revenue. As at August 2021, SVL’s corporate structure includes 6 subsidiary companies (Table 1).
[1] Video Lottery Terminal is a type of electronic gambling machine.
[2] Caymanas Park is Jamaica’s only horse racing track. SVL operates the track on a lease from the Jamaican Government.
[3] In addition to sports betting revenue, this segment also includes income from horseracing and VLTs.
[4] Personal Identification Number is a numeric or alpha-numeric number used in the process of applying phone credit to mobile devices (credit top ups).
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
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.
Colonial Fire & General Insurance Limited (Colfire)
CariCRIS reaffirms “good creditworthiness” credit ratings to Colonial Fire & General Insurance Company Limited
Colonial Fire & General Insurance Limited (Colfire)
RATING DRIVERS
Supporting Factors
- Robust distribution network underpins strong market position
- Continued adequate capitalization
- Continued good asset quality
- Continued profitability with profitable underwriting operations
- Adequate information systems and risk management policies
Constraining Factor
- Challenging economic environment with constrained access to foreign exchange
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 The Republic of Trinidad and Tobago
- Sustained growth in PAT by >15% over the next 2 years without impacting other financial health indicators like capital adequacy and asset quality.
Factors that could, individually or collectively, lead to a lowering of the Ratings and/or Outlook include:
- A further lowering of the credit rating of the Government of the Republic of Trinidad and Tobago
- A 2-notch deterioration of the credit rating of any of Colfire’s top 3 reinsurers by Standard and Poor’s Ratings Services
- A deterioration of the Company’s regulatory capital adequacy ratio below 150% over the next 12 months
- Loss of relationship with any of the Company’s major reinsurers due to issues relating to accessing foreign exchange
- A 15% fall in Motor Premium Income
COMPANY BACKGROUND
Colonial Fire Insurance Company Limited was founded by the late Mr. Cyril Lucius Duprey. It commenced operations in 1958 in Port of Spain, Trinidad, as a small, specialized company of qualified Underwriters. The Company’s name was amended in 1968 to Colonial Fire & General Insurance Company Limited (Colfire or the Company) to satisfy all general insurance needs in Property, Motor, Liability, Marine and Specialty insurance for both individual and institutional clients. The Company is currently 94.24% owned by CL Financial Limited, with the residual being held by several minority shareholders. In March 2021, CL Financial announced that it would accept bids for its shareholdings in Colfire, which currently remains up for sale. The Company derives 100% of its premium income from the Trinidad and Tobago (T&T) market. In addition, Colfire underwrites on average 7.5% and 14.1% respectively of total gross premiums and total motor insurance premiums in the T&T general insurance industry[1] and derived an average of 66.1% of its gross premium income from motor insurance over 2018-2020.
Colfire has one wholly owned subsidiary, Temple Properties Limited, a real estate company acquired in 2001 and incorporated in Trinidad & Tobago.
[1] Source: Central Bank of Trinidad and Tobago. Market information as at 31 December 2020.
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.
Bourse Securities Limited
RATING ACTION:
On June 15, 2022, CariCRIS upgraded the assigned Issuer/Corporate Credit ratings by 1-notch to CariA (Foreign and Local Currency Ratings) on the regional scale and ttA (Local Currency Rating) on the Trinidad and Tobago national scale to Bourse Securities Limited (BSL or the Company). A stable outlook was assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:
- Improving business conditions and company performance resulting in an increase in Profit After Tax (PAT) by 15% sustained for 3 financial periods
- An increase in net interest spread to at least 2% sustained for 3 financial periods
- An increase in Tangible Net Worth (TNW) by 15% sustained for 3 financial periods
- Further reduction in its funding concentration risk such that less than 40% of its funding is derived from BSL’s top 10 clients sustained for 2 financial periods
Factors that could, 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 leading to increased liquidity pressures
- Funding withdrawals from its top 3 institutional investors
Analysts’ Contact Info:
Keith Hamlet
Mobile: 1-868-487-8356
Megan Dass
Bourse Securities Limited
CariCRIS upgrades ‘good creditworthiness’ ratings for Bourse Securities Limited
The Jamaica National Group Limited (JN Group)
RATING DRIVERS
Supporting Factors
- Moderate diversification and good market position in Jamaica with international expansion.
- Strong capitalization of regulated subsidiaries in excess of regulatory requirements.
- History of profitable operations underpinned by diverse income streams
- Adequate liquidity to support debt servicing.
- Good governance structure and risk management practices.
Constraining Factors
- High cost to income ratio.
- Economic conditions in Jamaica could constrain revenue growth and profitability.
Rating Sensitivity Factors
Factors that could lead to an improvement in the ratings and/ or Outlook include:
- Expansion of the Group’s product and service offerings and/or improvements in operating efficiencies leading to a sustained increased in PAT of 10% for more than 2 years.
- An increase in the credit rating of the Government of Jamaica.
Factors that could lead to a lowering of the ratings and/ or Outlook include:
- A greater than 10% decline in total income for 2 consecutive years.
- A lowering of the credit rating of the Government of Jamaica.
- Breach of covenants stipulated in the final term sheet/prospectus for the bond offering.
- Failure of JN Bank to meet its debt servicing and repayment obligations to JN Group in a timely manner.
- An increase in the Company’s debt leading to a material change in its debt servicing ability.
COMPANY BACKGROUND
The Jamaica National Group Limited (JN Group or the Company), a holding company, was incorporated in Jamaica in February 2017. The Company’s subsidiaries (the Group) commenced operations as the Westmoreland Building Society in 1874. In 1960, the Westmoreland Building Society completed its first merger with the Manchester Mutual Building Society. In 1970, following several mergers, the Westmoreland Building Society executed several organisational adjustments, including a name change to the Jamaica National Building Society (JNBS or the Building Society). In 2016, the members of JNBS voted to reorganise the entity into the JN Group and convert the deposit-taking arm of the Building Society to Jamaica’s only mutually-owned (fully owned by savers and borrowers) commercial bank called JN Bank – the third-largest commercial bank in Jamaica. The Bank of Jamaica subsequently exchanged JNBS’ building society licence for a commercial banking licence and following the reorganisation of the JN Group, a mutual holding company, named The Jamaica National Group Limited, became the ultimate parent company for the JN subsidiaries.
The Company holds 100% ownership in MCS Group Limited (a non-financial holding company) and JN Financial Group Limited[1] (a financial holding company). The Group comprises 13 subsidiaries, two associated companies, and one related company in Jamaica, the United Kingdom (UK), Canada, the United States of America (USA), and the Cayman Islands (Chart 1). The Group’s portfolio of products and services span a wide array of financial, technological, creative, and fleet management services that support its position as a leading performer among mixed conglomerates in the region.
Analytical Contacts:
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
E-mail: khamlet@caricris.com
Maxwell Gooding
Tel: 1-868-627-8879 Ext. 229
E-mail: mgooding@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.