RATING ACTION:
On October 12, 2022, CariCRIS reaffirmed the ratings currently assigned to the USD 400 million debt issue of CariAA (Foreign and Local Currency Ratings) on the regional rating scale, and ttAA (Foreign and Local Currency Rating) on the Trinidad and Tobago national scale to The National Gas Company of Trinidad and Tobago Limited (or the Company). The stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement of the rating and/or outlook:
- An improvement in the CariCRIS credit rating of the GoRTT
- An increase in the DSCR to >3 times over the next 12 to 15 months leading to an improvement in the ability to service its amortised debt payments
Factors that could, individually or collectively, lead to a lowering of the rating and/or outlook:
- A fall in gross margins to below 15% for 2 consecutive years
- Debt / EBITDA increases to >5 times
- A fall in the Effective DSCR to <1 times for 2 consecutive years leading to a deterioration in the ability to service its amortised debt payments
- A significant decline in international prices of ammonia/ methanol, leading to a material decline in revenue to > 20%
- Inability to monetize receivables from T&TEC which could constrain NGC’s cash flows
- Deterioration in the CariCRIS credit rating of the GoRTT
RATING RATIONALE
Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the ratings currently assigned to the USD 400 million debt issue of The National Gas Company of Trinidad and Tobago Limited (NGC) of CariAA (Foreign and Local Currency) on the regional rating scale, and ttAA on the Trinidad and Tobago (T&T) national rating scale. These ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean and within T&T, is high.
CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on the expectation of continued elevated energy prices[1] for the remainder of 2022 supported by increased demand and supply disruptions due to the Russian/Ukraine conflict with prices expected to normalise in 2023. Going forward, the favourable outlook for energy and commodity prices is expected to continue to support NGC’s financial performance over the next 12-15 months. As a result, we anticipate continued profitability and robust debt protection metrics going forward.
Analysts’ Contact Info:
Anelia Oudit
Mobile : 1-868-487-8364
aoudit@caricris.com
Kyla Balwant
kbalwant@caricris.com
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