Category: Ratings Rationale

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.

The Beacon Insurance Company Limited

RATING ACTION:

On June 15, 2023, CariCRIS reaffirmed the assigned ratings of CariA- (Foreign and Local Currency Ratings) on the regional rating scale, and ttA- on the Trinidad and Tobago (T&T) national scale for The Beacon Insurance Company Limited. A stable outlook was maintained.

RATING SENSITIVITY FACTORS:

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

An improvement in the market share of general insurance products in its largest market, T&T to 10% or more.
Enhancement of Beacon’s risk management through the complete rollout of an enterprise risk management system.
An improvement in the overall credit profile for Beacon’s fixed income portfolio where more than 60% of the portfolio is rated investment grade on the S&P rating scale.
Increased profitability leading to an improvement in ROA and ROE to above 2.5% and 10% respectively for the next financial year.

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

A 2-notch deterioration of the credit rating of Beacon’s top reinsurer.
A deterioration of the company’s capital adequacy ratio to 150% or lower on a sustained basis for at least 6 months.
Loss of relationship with any of the Company’s major reinsurers and failure to provide viable replacements.
A second consecutive year of the Company reported a loss after tax.

Analysts’ Contact Info:

Keith Hamlet

Mobile : 1-868-487-4356

Sultan Mohammed

Mobile : 1-1868-362-7304

smohammed@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

Guyana Shore Based Incorporated

RATING ACTION:

On March 20, 2023, CariCRIS assigned initial ratings of CariAA- (Foreign and Local Currency Ratings) on the regional rating scale and gyAAA on the Guyana national scale (Foreign and Local Currency Rating) to the proposed debt facilities of up to US $33.7 million of Guyana Shore Base Incorporated (GYSBI). 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:

Successful operations of GYSBI over the next 2 years, leading to PAT improving by 15% or more annually.
A reduction in client concentration risk where a single client will not account for more than 50% of the Company’s revenue, sustained for 2 financial years.
An improvement in the sovereign risk profile of the Government of Guyana.

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

Breach of any of the debt covenants
Failure to satisfy any of the performance requirements of the contractual agreement with EEPGL.
A material reduction in GYSBI’s labor and plant efficiency metrics, which would lead to an increase in GYSBI’s operating expenses.
Failure of GYSBI to meet EEPGL’s KPIs stipulated in the 11-year contract.
A reduction in services provided to EEPGL leading to revenue declines of more than 15% for 2 consecutive years.
An increase in debt leading to increased leverage of above 3.5 times sustained for 2 financial periods.
An increase in debt servicing requirements, leading to a decrease in effective DSCR to below 1.25 times sustained for 2 financial years.
A reduction in services provided to EEPGL leading to revenue declines of more than 15% for 2 consecutive years.

Analysts’ Contact Info:

Keith Hamlet

Mobile : 1-868-487-4356

Sultan Mohammed

Mobile : 1-1868-362-7304

smohammed@caricris.com

National Investment Fund Holding Company Limited

RATING ACTION:

On June 29, 2023, CariCRIS reaffirmed the ratings currently assigned to the TT $4 billion bond issue (Series A, B and C) of The National Investment Fund Holding Company Limited (NIF) of CariAA (Local Currency Rating) on the regional rating scale and ttAA (Local Currency Rating) on the Trinidad and Tobago (T&T) national scale. CariCRIS also assigned the rating to the proposed bond issue of up to TT $1.2 billion of the NIF of CariAA (Local Currency Rating) on the regional rating scale and ttAA (Local Currency Rating) on the Trinidad and Tobago (T&T) national scale. A stable outlook was assigned and maintained on both ratings.

RATING SENSITIVITY FACTORS:

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

Improvement in the credit risk profile of the GORTT
Improvement in the credit risk profiles of TGU and RFHL

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

A deterioration in the credit risk profile of the GORTT over the next 12 months
A deterioration in the cash flow adequacy ratio to less than 1 time
A deterioration in the credit risk profiles of TGU and RFHL
Breach of any covenants of the bond
Failure to fully repay or successfully refinance Series A when it becomes due in August 2023

Analysts’ Contact Info:

Keith Hamlet

Mobile: 1-868-487-8356

Sharlene Gordon

Phone :1-876-618-9811

sgordon@caricris.com

Government of the Commonwealth of Dominica

RATING ACTION:

On June 15, 2023, CariCRIS reaffirmed the ratings for a US $25 million debt issue of the Government of the Commonwealth of Dominica (GOCD) of CariBB (Foreign and Local Currency Rating) on the regional 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:

Growth in real economic activity of 6% or more, sustained for at least 2 years
A fiscal surplus of more than 5% recorded for 2 consecutive fiscal periods

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

Debt/GDP ratio exceeding 100% for another 2 years
Economic and social disruption caused by natural disasters
Material reduction in grants and multilateral funding

Analysts’ Contact Info:

Stefan Fortuné

Mobile : 1-868-799-6751

sfortune@caricris.com

Kyla Balwant

Tel :1-868-627-8879

kbalwant@caricris.com

Premier Insurance Company Inc.

RATING ACTION:

On June 15, 2023, CariCRIS reaffirmed the Corporate Credit ratings of gyA+ (Local Currency Rating) and gyA (Foreign Currency Rating) on the Guyana national scale to Premier Insurance Company Inc. (Premier or the Company). A positive 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 our internal credit rating of the Government of Guyana
Sustained growth in PAT by >15% over the next year without adversely impacting regulatory capital and asset quality
An increase in the concentration of good quality, liquid fixed income instruments leading to improved asset risk
Sustained growth in TNW by >15% over the next 2 years
An improvement in the credit rating of TRINRE, Premier’s parent company

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

A lowering of our internal credit rating of the Government of Guyana
A 2-notch deterioration of the credit rating of any of Premier’s reinsurers by A.M. Best, Fitch Rating or Standard and Poor’s Ratings Services
Loss of relationship with any of the Company’s reinsurers
A deterioration in the Company’s Minimum Capital and Solvency requirements below the quantities stipulated by the BoG sustained for more than 6 months
A 10% fall in gross premium income for 2 consecutive years
A material deterioration in the Company’s investment asset quality sustained for a period of 6 months
A lowering of the credit rating of TRINRE, Premier’s parent company

Analysts’ Contact Info:

Keith Hamlet

Mobile: 1-868-487-8356

khamelt@caricris.com

Maxwell Gooding

mgooding@caricris.com

Development Finance Limited

RATING ACTION:

On June 15, 2023, CariCRIS reaffirmed the assigned issue ratings of CariAA- (Foreign and Local Currency Ratings) on the regional scale, and ttAA- (Foreign and Local Currency Ratings) on the Trinidad and Tobago (T&T) national scale to the TT $36 million bond issue of Development Finance Limited (DFL 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:

Improvement in the credit ratings 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

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

aoudit@caricris.com

Kyla Balwant

kbalwant@caricris.com

Bourse Securities Limited

RATING ACTION:

On June 15, 2023, CariCRIS reaffirmed the Issuer/Corporate Credit ratings assigned to Bourse Securities Limited (BSL or the Company) of CariA (Foreign and Local Currency Ratings) on the regional scale and ttA (Local Currency Rating) on the Trinidad and Tobago national scale. A stable outlook was maintained.

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 BSL’s funding is derived from its 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

mdass@caricris.com

www.caricris.com

info@caricris.com

Development Bank of Jamaica Limited

RATING ACTION:

On June 15, 2023, CariCRIS upgraded the assigned Issuer/Corporate Credit ratings by 1-notch to CariA- (Foreign Currency Rating) and CariA (Local Currency Rating) on the regional scale and reaffirmed the Jamaica national scale ratings of jmAA (Local Currency Rating) and jmAA- (Foreign Currency Rating) to the US $5 million debt issue of Development Bank of Jamaica Limited (DBJ or the Bank). 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 uplift in the creditworthiness of Jamaica, where DBJ derives 100% of its revenue, with an attendant improvement in business prospects for DBJ as well as improved profitability and loan portfolio quality
Improving business conditions over the next 12-15 months, thereby leading to growth in client base and sustained earnings growth

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

A reduction in funding by more than 25%
Interest rate spread falls by more than 150 basis points (bps)
A lowering of the creditworthiness of Jamaica

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

aoudit@caricris.com

Kyla Balwant

kbalwant@caricris.com

Sagicor Financial Company Limited

RATING ACTION:

On June 15, 2023, CariCRIS reaffirmed the assigned credit ratings of CariAA (Foreign and Local Currency Ratings) and jmAAA (Foreign and Local Currency Ratings) on the Jamaica national scale to the debt issue of up to US $76 million of Sagicor Financial Company Limited (SFC 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:

Substantial improvement in the market position and financial performance and profitability of Sagicor USA
Successful acquisitions and/or regional expansion over the next 12 to 15 months with a concomitant material improvement in any of its main segments’ market share and SFC’s overall financial performance
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
A significant change in capitalization, especially on account of future acquisitions resulting in the MCCSR falling to 175% or lower
Substantial deterioration in consolidated financial performance, with a greater than 15.6% fall in premium income
Decrease in Interest Coverage to <1.5X
A reduction in the creditworthiness of Jamaica where SFC derives more than 30% of its profits

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

aoudit@caricris.com

Jeffrey James

jjames@caricris.com