RATING ACTION:
On April 3, 2024, CariCRIS reaffirmed the assigned ratings at CariAA (Foreign and Local Currency Ratings) on the regional rating scale and ttAA (Local Currency Rating) on the Trinidad and Tobago (T&T) national scale to Trinidad and Tobago Unit Trust Corporation (TTUTC). 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 market and economic conditions over the next 12-15 months, leading to sustained Net Investment Income growth in excess of 30%.
• Diversification of funds under management to include a greater share of millennial unitholders.
• Successful expansion and implementation of operations into the Caribbean leading to positive impacts on revenue.
• Improvement in the cost to income ratio to 55% or below sustained for 2 financial years.

Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
• A 15% reduction in FUM sustained for 3 consecutive years.
• A deterioration in the credit quality of the fixed-income portfolios below investment grade.
• A reduction in total investment income to average earning assets to 1.5%; sustained for 3 consecutive years.

Analysts’ Contact Info:

Keith Hamlet
Mobile : 1-868-487-4356
khamlet@caricris.com

Sharlene Gordon
Mobile : 1-1876-564-5230
sgordon@caricris.com

www.caricris.com
info@caricris.com

Disclaimer: CariCRIS has taken due care and caution in the 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.

By Dr. Stefan Fortuné, Ph.D. Head, Research, Technical Services & Training

As geopolitical tensions escalate between Israel and Iran, the global oil market stands on the precipice of potentially significant fluctuations. With recent conflicts igniting fears of a wider regional disturbance, stakeholders are concerned about the ramifications on oil supply and pricing.

The last time crude oil prices breached the US $100 mark was in the spring of 2022, driven by a complex interplay of market dynamics and geopolitical factors, including a strong post-COVID rebound (especially in jet fuel), sanctions on Russia, and dwindling inventories. The above US $100 price of 2022 was only for a few months. A more sustained high price period occurred 2011-2014. At that time, the price environment was characterized by instability in several oil-producing regions. The situation today shares some common features to these high price periods in context and potential impact.

Israel and Iran are pivotal to the stability of the Middle East, a region synonymous with oil production. Although Israel is not a major oil producer, its strategic location and involvement in regional politics can influence market sentiments and disrupt oil logistics. Iran, on the other hand, holds some of the world’s largest reserves of oil and natural gas. The nation’s ability to influence oil prices is significant, as seen in past instances where geopolitical tensions involving Iran have led to spikes in oil prices.

Currently, the conflict could lead to heightened security risks in major shipping routes such as the Strait of Hormuz, through which about 20% of the world’s oil passes. Any disruption here could choke off supplies and cause oil prices to spike. Moreover, the possibility of involving other regional powers could exacerbate the situation, leading to a broader impact on global oil supply chains.

Furthermore, today’s oil market dynamics are influenced by a wider array of factors compared to 2022. These include higher inventories, the resurgence of U.S. shale oil production, changing energy policies in response to climate change, and the global push towards renewable energy. These factors could cushion the impact of any supply disruption, but they also add layers of complexity to predicting exact market reactions.

As we monitor this developing situation, stakeholders should prepare for volatility in the oil markets. The potential for oil prices to exceed US $100 per barrel is real, dependent on the conflict’s progression and any resultant disruptions in oil supply. Market participants would do well to stay informed and agile, ready to respond to rapid changes in the market landscape.

What are your views on this topic?

CariCRIS reaffirms its overall ‘high creditworthiness’ ratings to the TT $100 million Collateralised Mortgage Obligation of Home Mortgage Bank

Read More

RATING ACTION:

On March 12, 2024, CariCRIS reaffirmed the assigned ratings of ttAA- (National Local Currency Ratings) on the Trinidad & Tobago national scale, for Home Mortgage Bank’s Collateralized Mortgage Obligation – CMO 2022-01. 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 improvement in the credit rating of the sovereign over the next 12-15 months.
• Satisfactory repayment of Tranche A with payment flows in line with or above CariCRIS’ expectations.
• Sustained improvement in TTMF’s asset quality levels which reduces the originator risk.

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

• Persistent deterioration in the mortgage pool quality with delinquency levels of above 10% and/ or NPL ratio of above 5% within the underlying mortgage pool leading to heightened extension and/ or default risk over the next 12-15 months.
• Deterioration in TTMF’s NPLs to Gross loans ratio of above 10.5% sustained for 2 financial periods.
• A deterioration in the credit risk profile of T&T leading to increased market risk.
• Cashflow shortfalls from the mortgage pool that may impair payments of principals and interests.
• Replacement of TTMF as Administrator and Trustee and HMB as Registrar and Paying Agent with a lower rated counterparty.

Analysts’ Contact Info:

Keith Hamlet
Mobile: 1-868-487-4356
khamlet@caricris.com

Sharlene Gordon
Tel : 1-1876-618-9811
sgordon@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 assigns “adequate creditworthiness” ratings to The Jamaica National Group Limited

Read More

CariCRIS reaffirms overall ‘good creditworthiness’ ratings to bond issue of US $160 million of JMMB International Limited.

Read More

CariCRIS upgrades its credit ratings for Pan Jamaica Group Limited

Read More

RATING ACTION:

On March 12, 2024, CariCRIS upgraded the assigned Issuer/Corporate Credit ratings by 1-notch to CariA (Foreign & Local Currency Ratings) on the regional rating scale and jmAA (Foreign & Local Currency Ratings) on the Jamaica national scale rating to Pan Jamaica Group Limited (PJGL or the Group). 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 improvement in the ratings of the Government of Jamaica
• A substantial improvement in the Group’s financial performance with continued improvement in PAT margins resulting in a ROA of over 10% for 3 consecutive years

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

• Continued economic uncertainty leading to ongoing losses in investment income and a reduction in the profitability of the new operating lines which results in the Group incurring operating losses
• A significant decline of 50% or greater in SGJL’s dividend income
• A sustained effective DSCR of less than 1.5 times over a 2-year period

Analysts’ Contact Info:

Keith Hamlet

Mobile: 1-868-487-8356

khamlet@caricris.com   

Jeffrey James

Mobile : 1-868-713-5987

jjames@caricris.com    

www.caricris.com 

info@caricris.com