RATING ACTION:

On March 25, 2022, CariCRIS assigned initial credit rating of jmA (Foreign Currency Rating) on the Jamaica national scale to the up to US $160 million bond issue of JMMB International Limited. 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 GOJ’s credit rating over the next 12-15 months
• An improvement in the credit rating of JMMBIL’s ultimate parent JMMB Group Limited

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

• A deterioration in the GOJ’s credit rating over the next 12-15 months
• A lowering of the ratings of JMMBIL’s ultimate parent JMMB Group Limited
• Breach of any of the bond covenants including a deterioration below the capital regulatory requirements of any of the operating subsidiaries in their respective jurisdictions
• Failure of JMMBGL to fulfil its role as guarantor if called upon to do so

Analysts’ Contact Info

Keith Hamlet

Mobile: 1-868-487-8356

khamelt@caricris.com

Khadine Tavares

ktavares@caricris.com

www.caricris.com 

info@caricris.com

JMMB International Limited

Withdrawal of US $120 million Bond Issue Ratings

Caribbean Information & Credit Rating Services Limited (CariCRIS), the region’s credit rating agency, wishes to inform the public of the withdrawal of the US $120 million bond issue ratings and outlook for JMMB International Limited (JMMBIL or the Company), that were last reviewed and reported on by CariCRIS on June 16, 2021.

These ratings were withdrawn following CariCRIS’ receipt of notice from JMMBIL that the instrument was fully repaid. As a result, the rating associated with this instrument will no longer be kept under annual surveillance and as such there will be no further updates.

June 24, 2022

RATING ACTION:

On June 15, 2022, CariCRIS reaffirmed the assigned issuer credit ratings of CariA- (Local Currency Rating) on the regional rating scale and jmAA (Local Currency Rating) on the Jamaica national scale to the bond issue of up to J $3 billion of GraceKennedy Limited (GKL or the Group). 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 CariCRIS’ sovereign credit risk rating of Jamaica

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

• Decline in DSCR ratio to <1.33 times or fall in effective DSCR to below 1.5x
• Interest in Debt to EBITDA to >4.0 times
• A lowering of CariCRIS’ sovereign credit risk rating of Jamaica

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

aoudit@caricris.com

Nadia Sanchez

nsanchez@caricris.com

www.caricris.com 

info@caricris.com

RATING ACTION:

On June 15, 2022, CariCRIS reaffirmed the assigned issuer/corporate credit ratings of CariA+ (Foreign and Local Currency Ratings) on the regional rating scale, and ttA+ (Foreign and Local Currency Ratings) on the Trinidad and Tobago (T&T) national scale to Point Lisas Industrial Port Development Corporation Limited (PLIPDECO or the Company). A stable outlook was also maintained.

RATING SENSITIVITY FACTORS:

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

• A greater than 8% y-o-y improvement in revenue for 2 consecutive years
• An improvement in profits by 40% for 2 consecutive years excluding the effects of revaluation gain

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

• A material decline of 10% in revenue and profits in 2021
• Current ratio of <1x for a sustained period of 12-18 months
• Any material Company event that can result in default/breaches of covenants

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

aoudit@caricris.com

Brandon Singh

bsingh@caricris.com

www.caricris.com 

info@caricris.com

RATING ACTION:

On May 31, 2022, CariCRIS assigned initial issue ratings of CariAA- (Foreign and Local Currency Ratings) on the regional rating scale, and ttAA- on the Trinidad and Tobago (T&T) national scale to the proposed bond issue of up to TT $100 million 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 rating of the GORTT

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

COMPANY BACKGROUND

Development Finance Limited (DFL or the Company) is a non-bank financial institution licensed in Trinidad and Tobago (T&T) under the Financial Institutions Act (2008) and is registered with the Deposit Insurance Corporation. The Company was initially established as the Trinidad and Tobago Development Finance Company (TTDFC) in the 1970s. DFL’s major shareholders currently comprise of the Government of the Republic of Trinidad and Tobago (GORTT) (49.75%) and the Maritime Financial Group (49.75%), through its subsidiaries, the Maritime General Insurance Company Limited (33.17%) and Maritime Life (Caribbean) Limited (16.58%). The remaining 0.5% is held by DFL Caribbean Holdings Limited.

DFL’s mandate is aimed at providing funding and project structure for all small, medium, or large corporations that are engaged in development activities that can benefit the growth of the T&T economy.  From inception in the 1970’s, DFL’s core business was to provide financing for business development to Small and Medium Enterprises (SMEs) locally.  Since 2011 the Company has widened its product offering to include Merchant banking and FOREX services in addition to long-term commercial financing options. The Company’s products and services are offered through 6 main business lines which include debt arrangement and underwriting, buying and selling of foreign exchange, deposit-taking for fixed deposits, corporate and commercial lending for various financing needs, provision of guarantees, and letters of credit. DFL’s total assets stood at TT $860.6 million as at December 2021, and its total revenue for the year ended December 2021 was TT $22.8 million.

Analysts’ Contact Info:

Anelia Oudit

Mobile : 1-868-487-8364

aoudit@caricris.com   

Musa Abdullah

mabdullah@caricris.com   

www.caricris.com 

info@caricris.com  

RATING DRIVERS

Supporting Factors

• High credit quality of securitised loans in mortgage pool
• Good underwriting practices of TTMF, the originator of the mortgages within the pool
• Simple transaction structure, with effective credit enhancement built in
• Legal and regulatory framework supporting the transaction provides adequate protection to investors

Constraining Factor

• Mortgage pool seasoning along with a challenging economic environment could increase default risk

Rating Sensitivity Factors

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

• An improvement in the credit rating of the sovereign over the next 12-15 months

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

• Impairments (delinquencies above 7.5% or NPLs above 5%) in the underlying mortgage pool leading to heightened extension and/ or default risk
• Significant mortgage prepayments leading to a material reduction in excess spreads available to cover losses

BACKGROUND

CMO 2022-01 is a structured finance debt instrument being created by the Home Mortgage Bank (HMB or The Bank). The product was created to securitise residential mortgage assets purchased from the Trinidad Tobago Mortgage Finance Company Limited (TTMF) on the secondary mortgage market. CMO 2022-01 will offer participation certificates in 4 tranches in the amount of TT $100 million as follows:

1. Series A – TT $30.0 million with an average life of 0.96 years at an initial coupon rate of 3.00%
2. Series B – TT $20.0 million with an average life of 2.85 years at an initial coupon rate of 3.30%
3. Series C – TT $10.0 million with an average life of 4.25 years at an initial coupon rate of 4.00%
4. Series D – TT $40.0 million with an average life of 7.5 years at an initial coupon rate of 5.00%

The collateralised mortgages will be held in Trust by TTMF and governed by the laws of the Republic of Trinidad & Tobago and established by a Declaration of Trust. The investment security will have monthly coupon payments that are payable to all certificate holders. Certificates are structured to enable investors to participate in the acquisition and ownership of a pool of residential mortgages.  Each Certificate will represent an undivided beneficial ownership interest in the Mortgage Pool. The principal amounts of each tranche available for distribution (Series A to D) will be repaid sequentially from all scheduled and unscheduled (prepayments, lumpsum payments and payoffs) payments. The final principal payment is expected to coincide with the maturity of each respective tranche. Thus, Series A will be fully repaid before principal repayment starts on Series B and so on. The Bank will also issue 3 additional Series; T1, T2 and R that will not be available for distribution^[1].

Analytical Contacts:

Khadine Tavares

Tel: 1-876-616-9813

E-mail: ktavares@caricris.com

Keith Hamlet

Tel: 1-868-627-8879 Ext. 244

E-mail: khamlet@caricris.com

Website: www.caricris.com

E-mail: 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.

RATING DRIVERS

Supporting Factors:

• The Mutual Funds Industry is large and important to the economy of Trinidad and Tobago
• Dominant market share as the largest mutual funds provider in Trinidad and Tobago
• Investment portfolio characterized by good asset quality and healthy investment returns
• Strong risk management supported by improving operating efficiencies
• Continued good financial performance despite the challenging economic and capital market conditions

Constraining Factors:

• Existing legislation could serve to limit growth
• A large percentage of Funds Under Management are held by one age demographic and could impact long term growth.

 Rating Sensitivity Factors: 

 Factors that may lead, individually or collectively, 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 20%.
• Diversification of funds under management across age demographics
• Successful expansion into the Caribbean

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

• A sustained decline in equity prices and interest rates over the next 12-15 months, leading to a 20% decline in Net Investment Income
• A deterioration in the credit quality of the fixed income portfolios below investment grade.

COMPANY BACKGROUND

The Trinidad and Tobago Unit Trust Corporation (TTUTC or the Corporation) was established in 1981 by way of the Unit Trust Corporation of Trinidad and Tobago Act (the Act) and commenced operations in November 1982. Upon commencement of operations, the TTUTC introduced its First Unit Scheme (now called the Growth and Income Fund). The Corporation was established to serve two purposes: (i) to mobilize the savings of the domestic population in the Trinidad and Tobago financial system and channel these into desirable investments and (ii) to foster a wider shareholding democracy by providing persons of modest means with a facility to own shares. The initial contributors to the capital of TTUTC were the CBTT, the National Insurance Board, various local commercial banks, non-bank financial institutions and insurance companies.

Since its inception, the Corporation has evolved and expanded to become one of the largest financial services companies in Trinidad and Tobago with funds under management as at December 2021 of TT $24.9 Billion. The TTUTC now manages seven mutual funds consisting of the TTD Income Fund, the USD Income Fund, and the UTC Corporate Fund (3 fixed income funds), as well as the Growth and Income Fund and the Universal Retirement Fund (two balanced funds), the Calypso Macro Index Fund (a closed-ended equity fund), and the Global Investor Select Funds based in the Cayman Islands. The TTUTC continues to offer a range of services including, debit card services, bond processing, pension fund management and trustee services. The Corporation’s client base stood at 568,697(Individual 535,589 and Corporate 33,108) unitholders as at December 2021.

The TTUTC’s funds under management as at June 2021 represented approximately 7% of assets in the Trinidad and Tobago financial system^[1]. Given its size and importance to the financial services system as a financial intermediary, in 2013, it was designated as a Systemically Important Financial Institution (SIFI). The Corporation is regulated by the Trinidad and Tobago Securities and Exchange Commission (TTSEC) and the Trinidad and Tobago Stock Exchange (TTSE). In addition, given the Corporations status as a SIFI they adhere to the applicable principles outlined by the Central Bank of Trinidad and Tobago guidelines.

^[1] Central Bank of Trinidad and Tobago- Summary of Economic Indicators September 2021.

Analytical Contacts:

Sultan Mohammed

Tel: 1-868-627-8879 Ext. 240

E-mail: smohammed@caricris.com

Keith Hamlet

Tel: 1-868-627-8879 Ext. 229

E-mail: khamlet@caricris.com

Website: www.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.

RATING DRIVERS

Supporting Factors

• Leading market position in the Jamaica insurance industry and a strong distribution network support a consistent and healthy financial performance
• Overall financial stability supported by continued healthy profitability
• Strong capitalisation level, in excess of regulatory requirement

Constraining Factors

• Interest rate environment can challenge SLJ’s Asset Liability Management (ALM) position although rates are expected to increase in 2022
• Significant business and financial exposure to the highly indebted Jamaican economy

Rating Sensitivity Factors

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

• Improvements in the macroeconomic environment of Jamaica resulting in sustained higher levels of economic growth, i.e., real GDP growth of 2% – 3% sustained over the next 12 – 15 months, or significantly lower debt levels i.e., a debt to GDP ratio of below 75% by June 2023

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

• Restructuring of the sovereign (GoJ) debt profile leading to a haircut in the principal of government bonds or a more than 30% reduction in the value of these bonds, thereby adversely impacting SLJ’s concentrated long term annuity business
• Deterioration in the financial performance and profitability of SLJ, with a greater than 10% fall in premium income.

COMPANY BACKGROUND

Sagicor Life Jamaica Limited (SLJ or the Company), a member of the Sagicor Group of Companies, commenced operations in 1970 as the first Jamaican-owned life insurance company. In 2013, a holding company, Sagicor Group Jamaica Limited (SGJ) was established, and this entity owns 100% of SLJ. Sagicor Life Incorporated (SLI) is the majority shareholder of SGJ and the principal operating subsidiary of Sagicor Financial Company Limited (SFC)^[1], which itself owns 49.11% of SGJ. SLJ is considered the main operating subsidiary of SGJ. Following the reorganisation of the Jamaican operations, SLJ was delisted from the Jamaica Stock Exchange and replaced by SGJ.

The Company markets an extensive range of long-term and equity-linked Individual Life insurance products, Group Life, Group Health, Personal Accident plans and Group Pension plans. Some of the Company’s other services include residential and commercial mortgages, annuities, real estate development and management, investment management and lease financing.

Analytical Contacts:

Megan Dass

E-mail: mdass@caricris.com

Keith Hamlet

Cell: 1-868-487-8356

E-mail: khamlet@caricris.com

Website: www.caricris.com

E-mail: 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.

RATING DRIVERS

Supporting Factors

• Leading market positions and strong brand equity support a consistent and healthy financial performance
• Rebound in financial performance in 2021, following negative impacts of Covid-19 pandemic in 2020
• Continued comfortable capitalisation levels
• Strong and comprehensive enterprise risk management

Constraining Factors

• Uncertain interest rate environment has the potential to challenge the Group’s asset liability management
• Significant sovereign risk exposure to the highly indebted Jamaican economy despite the improved economic conditions

Rating Sensitivity Factors

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

• An increase in our internal ratings assigned to the sovereign, driven by continued favourable improvements in the macroeconomic environment of Jamaica and a lowering of the debt/GDP ratio

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

• Substantial deterioration in the financial performance and profitability of the Group, with a greater than 20% increase in net insurance benefits and claims and an accompanying 15% rise in operating expenses.

COMPANY BACKGROUND

Sagicor Group Jamaica Limited (“SGJ” or the “Group”) is a financial services conglomerate that was incorporated in 2013 and is domiciled in Jamaica.  The Group, which is listed on the Jamaica Stock Exchange (JSE), is 32.45% owned by LOJ Holdings Limited and 16.66% owned by Sagicor Life Incorporated, both wholly owned subsidiaries of Sagicor Financial Company Limited (SFC)^[1].  Its other major shareholder is PanJam Investment Limited (30.21%).  The Group is comprised of thirteen (13) subsidiaries with operations in three main countries^[2], these being Jamaica, The Cayman Islands and the United States of America.  Its three (3) largest operating subsidiaries are Sagicor Life Jamaica Limited (SLJ), Sagicor Bank Jamaica Limited (SBJ) and Sagicor Investments Jamaica Limited (SIJ).  The Group offers an extensive range of financial products and services in the areas of insurance, banking, asset management, real estate and retirement planning. As at September 30, 2021 the Group’s total assets stood at J $506.5 billion and total revenue was J $73.1 billion^[3]. In 2020, SGJ declared profit attributable to shareholders of J $13.8 billion, the second highest of conglomerates listed on the Jamaica Stock Exchange.

Analytical Contacts :

Jeffrey James

E-mail: jjames@caricris.com

Anelia Oudit

Mobile: 1-868-487-8364

E-mail: aoudit@caricris.com

Website: www.caricris.com

E-mail: 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.

RATING DRIVERS

Supporting Factors

• Long established player with strong brand equity and good market position
• History of profitable operations supported by healthy net interest spreads
• Good capitalization and liquidity levels
• Risk management framework supported by oversight from an independent Board of Directors
• Strong macroeconomic prospects for Guyana are expected to support IPED’s growth

Constraining Factors

• IPED operates in a single line of business in Guyana which is exposed to climate related risks
• Below average asset quality levels

Rating Sensitivity Factors

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

• An improvement in the credit risk profile of the Government of Guyana
• Improved ROA and ROE > 4.5% and 5.5% respectively sustained for more 2 years
• An improvement in Gross NPLs/Gross Loans to < 7.5%

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

• A deterioration in the credit risk profile of the Government of Guyana
• A deterioration of ROA and ROE < 1.5% and 2% respectively sustained for 2 financial periods
• A deterioration in IPED’s Gross NPLs/Gross Loans ratio to > 20%
• Written off loans exceeds GY$100 million in any financial year
• Deterioration in the Company’s leverage ratio (Debt/TNW) to 2.5 times or more

COMPANY BACKGROUND

The Institute of Private Enterprise Development Limited (IPED or the Company), located in Georgetown, Guyana, commenced operations in 1985. The Company was originally called the Institute of Small Enterprise Development, however, as its operations expanded, the name was changed to IPED in 1991. IPED was founded by Dr. Yesu Persaud and Mr. Wilfred Stoll to reduce unemployment^[1] and improve livelihoods by building sustainable micro and small enterprises. The initial capital of GY$0.5 million for the Company was provided through a grant from the Pan American Development Foundation, with the founders matching this grant with their funds. Additionally, support for start-up operations was also provided by the Foundation for International Training.

IPED is registered as a non-profit, non-governmental organization with its key objectives being the provision of business guidance, technical assistance, training and financing to micro and small businesses which enables them to build sustainable enterprises. The Company provides its range of services to several sectors across Guyana. The Company is recognized as an Institution of National Character^[2]and is therefore tax-exempted.

Analytical Contacts:

Maxwell Gooding

Tel: 1-868-627-8879 Ext. 235

E-mail: mgooding@caricris.com

 Keith Hamlet

Tel: 1-868-627-8879 Ext. 244

Mobile: 1-868-487-8356

E-mail: khamlet@caricris.com

Website: www.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.