RATING ACTION:

On June 15, 2022, CariCRIS has reaffirmed the ratings currently assigned to the US $10 Million debt issue (notional) of Dominica Agricultural, Industrial and Development Bank (DAID or the Bank) at CariB (Foreign and Local Currency Ratings) on the regional rating scale. 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:

• An upgrade to the sovereign credit rating of the GOCD
• Improvement in the NPL ratio to less than 16%
• Adherence to the EIB’s revised financial covenants
• Sustained profitable operations for more than 2 financial periods

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

• A change in the sovereign credit rating of the GOCD
• Sustained NPL ratio of 45% or more over for the next 12 – 15 months
• Further delay in the full implementation of the Bank’s Enterprise Risk Management Framework
• Any loss of major funding lines without identification of a suitable alternative
• A decline in TNW coverage of net NPLs to less than 1 time over the next 12 – 15 months
• A fall in the Bank’s capital adequacy ratio to less than 25% over the next 12 – 15 months

RATING RATIONALE

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the assigned ratings to the US $10 million debt issue (notional) of the Dominica Agricultural, Industrial and Development Bank (DAID or the Bank) to CariB (Foreign and Local Currency Ratings) on the regional rating scale. These ratings indicate that the level of creditworthiness of this notional debt obligation, adjudged in relation to other debt obligations in the Caribbean is weak.

CariCRIS has maintained a stable outlook on the ratings. The stable outlook is based on our expectation that there will be continued improvements in the Bank’s asset quality. The improvement is underpinned by the gradual easing of COVID-19 related movement restrictions in the Commonwealth of Dominica and an associated improvement in economic activity. This is expected to result in the Bank’s improved financial performance and improved asset quality. Additionally, the level of support that is being provided to the Bank through its Government shareholding and supportive lenders also supports the outlook.

Analysts’ Contact Info:

Keith Hamlet

Mobile: 1-868-487-8356

khamlet@caricris.com    

Khadine Tavares

ktavares@caricris.com

www.caricris.com 

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 reaffirmed its ratings for Dominica Agricultural, Industrial and Development Bank

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Caribbean Information & Credit Rating Services Limited (CariCRIS), the region’s credit rating agency, has today placed Eastern Credit Union Co-operative Society Limited (ECU) on Rating Watch – Developing.

This Rating Action was taken as a result of ECU’s lack of cooperation with providing us key information requested to facilitate the completion of our annual rating surveillance report for the 2021/22 period, despite our several attempts to obtain same. Furthermore, based on recent media releases, CariCRIS notes that there may be potential legal matters with ECU executives ongoing as well as investigations into its operations by the Commissioner of Co-operatives^[1]. We are concerned that these developments could adversely impact the credit union’s stability and financial performance going forward.

CariCRIS will continue to liaise with ECU’s personnel over the coming weeks to obtain the requested information and to determine the impact of recent events on ECU’s creditworthiness and adjust our ratings accordingly. ECU is currently rated CariBB+ (Foreign and Local Currency Ratings) on the regional rating scale and ttBB+ on the Trinidad and Tobago (T&T) national scale with a stable outlook assigned.

A CariCRIS rating is placed on Rating Watch – Developing when events occur that may affect the credit quality of the issuer/issue, the impact of which cannot be accurately assessed at that point in time. A rating placed under Rating Watch does not imply that the rating will necessarily change.

August 17, 2022

^[1] The Office of the Commissioner for Co-operatives is responsible for regulating and supervising co-operatives in Trinidad and Tobago, under the legislative requirement of the Co-operative Societies Act, Chapter 81:03 of the Laws of the Republic of Trinidad and Tobago.

Eastern Credit Union placed on Rating Watch – Developing

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On May 10, 2022, Caribbean Information & Credit Rating Services Limited (CariCRIS), the region’s credit rating agency, placed the Government of the Virgin Islands (GoVI) on Rating Watch – Developing. This Rating Action was based on uncertainty surrounding the continuation of the Assembly’s control of government following the publication of the findings and recommendations of the Commission of Inquiry (COI), and the subsequent arrest of the then Premier and collapse of Government. A new “Unity Government” has been formed and its plan of implementation of the COI’s recommendations (except for direct United Kingdom (UK) Government control) has been accepted by the UK Government. CariCRIS now believes that there is sufficient clarity and stability surrounding the matter to remove the Rating Watch and re-affirm the credit ratings of the GoVI at CariAA- (Foreign Currency and Local Currency), with a stable outlook^[1].

August 11, 2022

^[1] Refer to CariCRIS’ Credit Rating Rationale on the GoVI dated March 17, 2022

CariCRIS re-affirms the Government of the Virgin Islands’ credit ratings

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