Category: Ratings Rationale

GraceKennedy Limited (GKL)

RATING ACTION:

On December 7, 2022, CariCRIS assigned initial issuer/corporate credit ratings of CariA- (Local and Foreign Currency Ratings) on the regional scale and jmAA (Local and Foreign Currency Ratings) on the Jamaica national scale to GraceKennedy Limited (GKL 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 CariCRIS’ sovereign credit risk rating of Jamaica
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 GKL Group’s overall financial performance

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

Substantial and sustained deterioration in operating revenue of more than 11.5% over 2 successive years, leading to a material deterioration in operating margin to below 6.5%
A more than 15% rise in COGS as a percentage of total revenue leading to a fall in GP margin to below 32%
A lowering of CariCRIS’ sovereign credit risk rating of Jamaica

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

Nadia Sanchez

nsanchez@caricris.com

Wigton Windfarm Limited

RATING ACTION:

On December 7, 2022, CariCRIS reaffirmed the assigned issue credit ratings of CariBBB (Local Currency Rating) on the regional scale and jmA (Local Currency Rating) on the Jamaica national scale to the J $5.8 billion bond issue of Wigton Windfarm Limited (Wigton or the Company). 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:

Successful diversification by the Company into other renewable sources of energy or geographical markets, thereby boosting revenue stability and/or expansion.
Improved operating efficiency, with capacity and availability metrics consistently meeting targets.

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 Power Purchase Agreements.

RATING RATIONALE

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the assigned issue ratings of CariBBB (Local Currency Rating) on the regional rating scale and jmA (Local Currency Rating) on the Jamaica national scale to the J $5.8 billion bond issue of Wigton Windfarm Limited (Wigton or the Company). The regional scale rating indicates that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is adequate. The national scale ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in Jamaica is good.

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on our expectation of continued good performance by Wigton over the next 12-15 months, driven by the key credit drivers supporting the ratings, with all debt service commitments expected to be paid in a timely manner over the period.

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

Kyla Balwant

kbalwant@caricris.com

New Fortress Energy South Power Holdings Limited

RATING ACTION:

On December 7, 2022, CariCRIS reaffirmed the credit ratings assigned to the up to US $285 million bond issue of New Fortress Energy South Power Holdings Limited (NFE SPH or the Company) of CariA- (Foreign and Local Currency Ratings) on the regional rating scale and jmAA- (Local Currency Rating) on the Jamaican national. 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 the CHP plant over the next two to three years, in accordance with design specifications and on-time compliance with the PPA and SSA deliverables over the period.
An improvement in the creditworthiness of the guarantor (NFE), sustained over 2 consecutive years.
2 consecutive years of reported profit after tax of the Company, leading to an improvement in its financial position and TNW.

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

Deterioration in the creditworthiness of the guarantor (NFE), thereby reducing its ability to honour its guaranteed commitment to NFE SPH in a timely manner, if so required
Breach of contract by the O&M counterparty, Caribbean Blue Skies Energy, which may have a negative impact on operations
Any material litigation which may affect NFE or NFE SPH
Breach of any of the bond covenants
A material reduction in the CHP plant’s availability which would impair its ability to deliver output stipulated in the PPA and SSA
Failure by NFE or NFE SPH to capitalise the principal reserve account, at the appropriate time
The inability of NFE SPH to refinance the bullet payment if necessary

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.

Analysts’ Contact Information

Keith Hamlet

Mobile : 1-868-487-4356

khamlet@caricris.com

Sultan Mohammed

Mobile : 1-1868-362-7304

smohammed@caricris.com

Government of Barbados

RATING ACTION:

On December 7, 2022, CariCRIS reaffirmed the Issuer/Sovereign Credit ratings of CariBB (Local Currency) and CariBB- (Foreign Currency) on its regional rating scale assigned to the Government of Barbados (GOB). The outlook was revised to Positive.

RATING SENSITIVITY FACTORS:

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

A decrease in the total public sector debt to below 120% of GDP
A fiscal balance better than -1% of GDP over the next 12 months

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

Import cover below 12 weeks with no likely sources to increase reserves
Delays in the construction of tourism-related investment projects scheduled for completion in 2023
Derailment in any material way of the BERT 2022 plan

Analysts’ Contact Info:

Stefan Fortuné

Phone: 1-868-799-6751 (m)

sfortune@caricris.com

Maxwell Gooding

Phone: 1-868-627-8879

mgooding@caricris.com

PanJam Investment Limited

RATING ACTION:

On December 7, 2022, CariCRIS reaffirmed the assigned Issuer/Corporate Credit ratings at CariA- (Foreign & Local Currency Ratings) on the regional scale and jmAA- (Foreign & Local Currency Ratings) on the Jamaica national scale to PanJam Investment Limited (PanJam or the Company). 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 ratings of the Government of Jamaica
A sustained improvement in effective DSCR of more than 3 times over a 2-year period

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

Fall in occupancy below the break-even level of 50%
Continued economic uncertainty leading to ongoing losses in investment income and a pause on ongoing construction projects which can results in a fall in total operating revenue by over 45%
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:

Anelia Oudit

Mobile : 1-868-487-8364

Jeffrey James

jjames@caricris.com

Jamaica Public Service Company Limited

RATING ACTION:

On December 7, 2022, CariCRIS reaffirmed the assigned ratings of CariA (Local Currency Rating) and CariA- (Foreign Currency Rating) on the regional rating scale, and jmAA+ on the Jamaica national scale to Jamaica Public Service Company Limited (JPS or the Company). 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 credit rating of the Government of Jamaica over the next 12 – 15 months
Continued improvement in the economic conditions in Jamaica over the next 2 years, thereby leading to increased demand for energy

Factors that could, individually or collectively, lead to a lowering in the ratings and/or Outlook include:

A deterioration in the credit rating of the Government of Jamaica over the next 12 – 15 months
Failure to satisfy any existing debt covenants
At least 2 consecutive years of declining operating profit by 10% or more

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

Kyla Balwant

kbalwant@caricris.com

Endeavour Holdings Limited

RATING ACTION:

On December 7, 2022, CariCRIS reaffirmed the assigned issue ratings at CariA (Local and Foreign Currency Ratings) on the regional scale and ttA (Local Currency Rating) on the Trinidad and Tobago national scale to the TT $400 million bond issue of Endeavour Holdings Limited (EHL or the Company). 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 ratings of the Government of Trinidad and Tobago
Occupancy levels rising to above 95%

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

A 10% decline in annual rental income
Occupancy levels declining to below 75%
The inability to refinance the bond/balloon payment by March 2023 and breach of any of its financial covenants thereafter for 2 consecutive years form FY2023/23
A fall in the effective DSCR to below 1.5 times for 2 consecutive years

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

Brandon Singh

bsingh@caricris.com

Proven Group Limited

RATING ACTION:

On November 3, 2022, CariCRIS reaffirmed the assigned ratings of CariBBB (Foreign and Local Currency Ratings) on the regional rating scale, and jmA (Foreign and Local Currency Ratings) on the Jamaica national scale to PROVEN Group Limited (PROVEN or the Group). 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 GOJ’s credit rating over the next 12-15 months
An improvement in operating profit greater than 20% for 2 consecutive years
Cost to Income ratio improves to 75% and below
Improvement of asset quality ratio to below 8%

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

Economic environment negatively impacting revenue streams leading to losses
Increase of PROVEN’s stand-alone debt to equity ratio to above 2 times
A systemic increase in liquidity pressures in the environment leading to funding withdrawals from large institutional investors
Deterioration of asset quality ratio to over 12%
Cost to Income ratio weakens to 75% and over for another year
A deterioration in the GOJ’s credit rating over the next 12-15 months

RATING RATIONALE

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Corporate Credit Ratings of CariBBB (Foreign and Local Currency) on the regional rating scale, and jmA on the Jamaica national scale to PROVEN Group Limited (PROVEN or the Group). The regional scale ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in Jamaica and the wider Caribbean is adequate. The national scale ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in Jamaica is good.

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is premised on our expectation that PROVEN will continue to have profitable operations over the next 12-15 months supported by the Group’s recent acquisitions of Roberts Manufacturing Company Limited^[1] (RMCL), PROVEN Bank (Cayman) Limited^[2] (PBL) and Heritage Education Fund Limited^[3] (HEFL) as well as its 20% equity interest in JMMB Group Limited (JMMBGL)^[4]. Notwithstanding this, the global geopolitical environment and significant inflation concerns which have resulted in aggressive interest rates hikes, can challenge the Group’s overall financial performance over the next 12-15 months.

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364