Trinidad and Tobago Mortgage Finance Company Limited

RATING DRIVERS

Supporting Factors

Moderate market position in T&T’s real estate mortgage market, supported by TTMF’s crucial role in the implementation of GORTT’s national housing policy
Comfortable capitalization, reflected in high capital adequacy and good capital coverage of total assets
Continued good financial performance in 2020 despite a fall in profitability

Constraining Factors

Asset quality adversely impacted by the COVID-19 pandemic
Asset/liability mismatch increases exposure to potential liquidity risks given high reliance on debt financing
Lack of geographic diversity in TTMF’s revenue and funding exposes the company to significant sovereign risk

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
The advancement of the proposed merger over the next 12 months which will lower funding costs and introduce new products
Successful completion of housing projects over the next 12 months which should grow TTMF’s subsidized mortgage portfolio

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
A rise in the cost to income ratio to 55% or greater
A sustained increase in interest rates by 100 basis points or greater over the next 12 months, resulting in increased debt funding costs
A material reduction (50% or greater) in or complete withdrawal of subsidized funding from the GORTT
NPLs/Gross loans greater than 8% for 2 consecutive years

COMPANY BACKGROUND

Trinidad and Tobago Mortgage Finance Company Limited (TTMF) was incorporated under the Companies Act of Trinidad and Tobago on December 3, 1965. Its shareholders are the Government of the Republic of Trinidad and Tobago (GORTT) and the National Insurance Board of Trinidad and Tobago (NIBTT), with shareholdings of 49% and 51% respectively. TTMF is not a licensed deposit-taking institution and relies primarily on bonds to fund its lending operations.

TTMF was formed to fulfil the GORTT’s mandate of providing affordable residential mortgage financing to low to middle-income households in Trinidad and Tobago (T&T). It is the lead vehicle for mortgage financing under the GORTT’s Affordable Housing Finance Programme (2% and 5% Mortgage Programme). It is also a key part of the State’s housing business model in which the Trinidad and Tobago Housing Development Corporation (HDC) constructs the houses, and TTMF provides the mortgage financing. Although the HDC refers potential homeowners to the TTMF, they can obtain financing from other institutions. TTMF widened its target market several years ago to include all persons interested in residential mortgage financing. As such, the company’s product range now includes subsidized and open market residential mortgage loans as well as home equity loans with tenors of up to 30 years at stable interest rates, currently ranging between 2% and 6% per annum^[1].

In 2014, the GORTT approved a merger to create an institution conceptualized to leverage on synergies between TTMF and Home Mortgage Bank (HMB). In 2016, a Memorandum of Understanding (MOU) was signed between the TTMF and HMB, which allows both companies to derive benefits from a close corporate alliance while maintaining the integrity and independence of both companies. Under the terms of the MOU, HMB is required to develop appropriate products and markets for the sale of securitised mortgage products to provide consistent sources of low-cost long-term financing to TTMF, by way of an agreed programme of mortgage purchases. Following the completion of a cost benefit assessment earlier in 2021 by PricewaterhouseCoopers Advisory Services Limited (“PwC”) on the type of merger to be pursued, approval to commence the merger of both entities was granted by the Minister of Finance. The approved method for the merger is a Distribution in Specie, whereby all assets and liabilities of the liquidated HMB will be transferred to TTMF.

[1]eives a Government subsidy for its 2% and 5% mortgage rates, through which qualifying citizens can benefit from subsidized interest rates.

Analytical Contacts:

Jeffrey James

Tel: 1-868-627-8879 Ext. 236

E-mail: jjames@caricris.com

Anelia Oudit

Tel: 1-868-627-8879 Ext. 226

Mobile: 1-868-487-8364

E-mail: aoudit@caricris.com

Website: www.caricris.com

Email: 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.

The Government of Anguilla

RATING DRIVERS

Supporting Factors

Support from the UK Government as a British Overseas Territory
The rebuilding of the economy and infrastructure continues following the passage of Hurricane Irma, although temporarily derailed due to COVID-19
Fiscal performance remains carefully managed to control debt accumulation

Constraining Factors

Small island developing state with significant capacity constraints, compounded by negative COVID-19 impacts
Breached debt management benchmarks and increased debt servicing requirements
Financial sector is characterized by high non-performing loans and low capitalization

Rating Sensitivity Factors

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

Real GDP growth in excess of 5% over pre-hurricane level of GDP for at least 2 years
A fiscal surplus of more than 5% of GDP recorded for at least 2 consecutive fiscal periods
Meaningful diversification of the economy

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

Delay in the implementation of GST in 2022
A significant decline in grant support without other compensating revenues
A change in the island’s status as a British Overseas Territory or a material change in the level of support rendered to Anguilla
The banking sector’s capitalization ratio falling below 8%

SOVEREIGN BACKGROUND

Anguilla is the most northerly of the Leeward Islands in the Eastern Caribbean. Apart from the main island of Anguilla itself, which is sixteen (16) miles long and a maximum of three (3) miles wide, the territory includes a number of smaller uninhabited islands and cays. The island is noted for its ecologically important coral reefs. Anguilla is parliamentary representative democratic dependent Overseas Territory of the United Kingdom. The 1982 Constitution (amended in 1990) provides for a Governor, an Executive Council and a House of Assembly. The present Governor, Her Excellency Ms. Dileeni Daniel-Selvaratnam, took office in January 2021, and is responsible for external affairs, international finance, defence and internal security (including the police force) and the public service. General Elections were held on the 29 June 2020. The Honourable Premier, Dr. Ellis Webster of the Anguilla Progressive Movement (APM) was inaugurated on June 30, 2020. The APM currently holds seven out of the eleven parliamentary seats.

Construction and tourism are the main sources of economic production. Construction activity is typically driven by private sector investment in hotel development. Anguilla’s economy is highly vulnerable to downturns in the global economy, high international oil prices and unfavourable weather conditions.

Analytical Contacts:

Stefan Fortuné

Tel: 1-868-627-8879 Ext. 227

E-mail: sfortune@caricris.com

Maxwell Gooding

Tel: 1-868-627-8879 Ext. 228

E-mail: mgooding@caricris.com

Website: www.caricris.com

Email: 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.

Guardian Holdings Limited

RATING DRIVERS

Supporting Factors

Moderate industry diversification and good market position with a strong presence in the English and Dutch speaking Caribbean
Continued good financial performance underpinned by the performance of the Group’s operating subsidiaries
Adequate liquidity to support debt servicing
Strong capitalization of the Group’s subsidiaries in excess of regulatory requirements supports the sustainability of GHL
Risk Management systems support the execution of strategic goals

Constraining Factors

Structural subordination of GHL’s cash flows may impact timely debt servicing
Weak economic conditions in Trinidad and Jamaica expose the Group to downside risks

Rating Sensitivity Factors

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

Expansion of the Group’s product and service offerings and/or improvements in operating efficiencies leading to a sustained increase in PAT of 10% or more for more than 2 years
An improvement in the credit rating of the Government of The Republic of Trinidad and Tobago

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

A fall in GHL’s dividend receipts from the Group’s subsidiaries leading to a fall in the cash flow adequacy ratio below 1 time sustained for 3 financial periods
A lowering of the ratings of any of the Group’s top 5 reinsurers
A lowering of the credit rating of the Government of The Republic of Trinidad and Tobago
Breach of covenants stipulated in the final term sheet/prospectus for the bond offering
Re-emergence of regulatory constraints on dividends payable by GHL’s major operating subsidiaries

COMPANY BACKGROUND

Guardian Holdings Limited (GHL or the Company), is a public limited liability holding company incorporated in Trinidad and Tobago in November 1982. GHL and its subsidiaries, known as “the Group”, constitute a diversified financial services group with a focus on life, health, property and casualty insurance, pensions and asset management and is one of the largest insurance services providers in the Caribbean region. The Group’s subsidiaries provide financial services through the production, distribution, and administration of insurance and investment products. There are three main business segments within the Group: Life, Health and Pensions (LHP), Property and Casualty Insurance (P&C) and Asset Management Services. The Group has exhibited steady growth over the years and currently serves markets in 21 countries across the English and Dutch speaking Caribbean, including Trinidad & Tobago, Barbados, Jamaica, Curacao, Aruba, St. Maarten and Bonaire. The Group’s products and services are marketed and distributed throughout the Eastern Caribbean, the Bahamas, the Cayman Islands, the United States Virgin Islands and Belize.

The ultimate parent company of GHL is the NCB Financial Group (NCBFG) with 61.77% (143,326,379 ordinary shares)^[1] shareholding as at September 2021. NCBFG is a financial conglomerate that provides a suite of financial products and services through its subsidiaries and associates across the Caribbean. The other major shareholders of GHL include large corporates across the Caribbean.

In September 2020, GHL acquired 100% of the insurance and annuities business of the NCB Insurance Company (NCBIC)^[2]. The acquisition was funded through the issue of a J $13.4 billion unsecured, fixed rate bond in 5 tranches. Each tranche is serviced through quarterly interest payments and principal repayments by way of bullet payments upon maturity.

^[1] On June 16, 2021, NCBFG disposed of 451,612 GHL ordinary shares to facilitate the listing of GHL on the Jamaica Stock Exchange

^[2] NCBIC and GLL are domiciled in Jamaica. NCBIC is a provider of insurance, long-term investment, and pension services to individual and group clients

Sygnus Credit Investments Limited

RATING DRIVERS

Supporting Factors:

Adequate financial performance supported by growing revenue and profits
Consistent asset growth supported by moderately diversified interest-earning assets with good asset quality.
Adequate governance structure and risk management
Generally favorable capitalization and liquidity levels, but high cost of funds

Constraining Factors:

Small size may hamper growth potential
Exposure to sovereigns with an elevated level of economic uncertainty increases risk to SCI

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
Improving business conditions over the next 12-15 months, thereby leading to growth in client base and sustained earnings growth
SCI’s ability to attract and retain lower cost funding

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

Deterioration of asset quality ratio to 8% or more
Increase of SCI’s debt to TNW ratio to over 1.25 times
Cost to Income ratio weakens to 75% and over
A sustained decrease in yield from interest earning assets by over 100 basis points or greater over the next 12-15 months, thereby leading to a significant tightening of the net interest spread earned on investments
A deterioration in the GOJ’s credit rating over the next 12-15 months

COMPANY BACKGROUND

Sygnus Credit Investments Limited (SCI or the Company) is a specialty Private Credit Investment Company incorporated in Saint Lucia in January 2017 under the International Business Companies Act 1999. The Company is listed on the Jamaican Stock Exchange (JSE), in the main US and JA dollar markets, following the completion of an Initial Public Offering (IPO) in 2018 with an Additional Public Offering (APO) completed in 2020. Following SCI’s listing, the Company became subject to all laws applicable to issuers of securities in Jamaica listed on the stock exchange, as well as the regulatory authority of the JSE, the Financial Services Commission and the Companies Office. The largest single shareholder of SCI is ATL Group Pension Fund Trustees Nominee Limited, which currently holds 4.6% of SCI’s total shareholding as at June 2021.

SCI has no direct employees as its SCI’s investment activities are managed and administered by its Investment Manager, Sygnus Capital Limited (SCL)^[1] (Chart 1). SCL is a licensed securities dealer in Jamaica and is regulated by the Financial Services Commission^[2].

Chart 1

SCI’s Corporate Structure as at June 2021

Source: Sygnus Group

^[1] On 13^th May 2021, a new investment management agreement was put in place that effected a change in Investment Manager from Sygnus Capital Management Limited to Sygnus Capital Limited (SCL). SCL is a wholly owned subsidiary of Sygnus Capital Group Limited.

^[2] As a registered broker, Sygnus Capital is committed to assisting local and regional clients to access financing through the debt or equity capital markets, as well as non-traditional channels through their Private Credit Investment companies which include SCI.

Analytical Contacts:

Musa Abdullah

Tel: 1-868-627-8879 Ext. 233

E-mail: mabdullah@caricris.com

Anelia Oudit

Tel: 1-868-627-8879 Ext. 226

Mobile: 1-868-487-8364

E-mail: aoudit@caricris.com

Website: www.caricris.com

Email: info@caricris.com

Eastern Caribbean Home Mortgage Bank

RATING DRIVERS

Supporting Factors:

Consistent growth in the Company’s asset base, underpinned by a relatively diversified investment portfolio
Adequate liquidity and capitalization levels and generally favorable cost of funds
Healthy financial performance supported by robust growth in income and profitability
Adequate risk management and governance structure guided by continuously updated policies with oversight by the Board of Directors

Constraining Factor:

Exposure to financial risks arising from economic conditions in the OECS

CariCRIS’ Rating Sensitivity Factors:

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

Rising profit margins and sustained earnings growth for ECHMB over the next 3 years
Further diversity in income streams through the successful launch of new products and services
Further diversity in its funding to include sources from outside the OECS region
Strengthening of its capitalization level to above 20%

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

A significant tightening of the net interest spread below 1% earned on investments and a material decline in profitability of 10%
Lowering of the Company’s Tangible Net Worth to Total Assets to below 12%

COMPANY BACKGROUND

Eastern Caribbean Home Mortgage Bank (ECHMB or the Company) was created pursuant to the ECHMB Agreement Act (1995) and commenced operations on April 22, 1996. It is a privately managed corporation, and the current 65 shareholders are all financial institutions from the Organisation of Eastern Caribbean States (OECS) as well as from the wider Caribbean. These financial institutions include the Eastern Caribbean Central Bank (ECCB), commercial banks, social security agencies, insurance companies, mortgage companies, building and loan associations and credit unions. The largest single shareholder is the ECCB, which currently holds 24.9% of ECHMB’s total shareholding.

ECHMB was established with the primary objective of developing the secondary mortgage market within 8 participating member countries of the OECS, namely Anguilla, Antigua & Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia and St. Vincent and the Grenadines. The main activity of the Company has traditionally been the purchase and sale of mortgages to develop and maintain a secondary market for residential mortgages in the member territories. In FY2016^[1], following years of deteriorating mortgage market conditions, ECHMB expanded its mandate to become more relevant to the changing external environment. Given its considerably increased cash and investment portfolio in relation to its mortgage assets, the Company, placed more emphasis on the investment side of the business by broadening the range of financial assets in which it can invest and simultaneously widening the permissible jurisdictions for its investments to include the wider Caribbean region and the United States. In FY2019, ECHMB launched its repurchase agreement programme, towards increasing its investment product offerings and diversifying its funding base.

^[1] Financial Year refers to April 1 to March 31.

Analytical Contacts:

Keith Hamlet

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

E-mail: khamlet@caricris.com

Kathryn Budhooram

Tel: 1-868-627-8879 Ext. 227

E-mail: kbudhooram@caricris.com

Website: www.caricris.com

Email: info@caricris.com

The Government of The Republic of Trinidad and Tobago

RATING DRIVERS

Strengths:

Large regional economy, supported by both energy and non-energy activities
Satisfactory financial sector, monetary and exchange rate conditions
Comfortable debt service coverage when compared to its regional peers

Weaknesses:

International reserves continue to decline
COVID-19 has significantly eroded fiscal performance
Social vulnerabilities persist, worsened by rising unemployment and heightened crime levels
Continued lack of reliable and timely macroeconomic data

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 general government debt to below 65% of GDP over the medium-term
A sustained improvement in debt servicing capability to above 7 times over 2 consecutive years
A fiscal surplus in excess of 3% of GDP sustained over 2 consecutive years
A rise in the import cover to 12 months or more over the next 24 months

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

An increase in the total general government debt to above 100% of GDP over the next 12 months
A sustained deterioration in debt servicing capability to below 3 times over 2 consecutive years
A fiscal deficit in excess of 9% of GDP sustained over 2 consecutive years
A fall in the import cover to 6 months or less over the next 12 months
GDP contraction of >2% in 2021 and/or growth of <1% in 2022

SOVEREIGN BACKGROUND

Trinidad and Tobago (T&T) are the two southernmost islands of the Caribbean chain and lie just seven miles off the north-eastern coast of Venezuela. The islands are outside of the usual path of hurricanes and have largely been spared the annual devastation that some of their northern neighbours have endured from storms and weather-related troughs. The population, estimated to be 1.4^[1] million people, comprises descendants of primarily India and Africa. The reported adult literacy rate is above 98 per cent^[2] and education is free up to the secondary school level, with significant subsidization of tertiary education. The official language is English.

The expansion of T&T’s oil industry in the 1950s moved the country from a sugar-based to an energy-based economy. The vast petroleum and natural gas reserves have enabled the country to develop downstream industries such as the production of liquefied natural gas, methanol and nitrogenous fertilizers. The country also has strong financial services, manufacturing, and wholesale & retail distribution sectors. Tourism is a growing sector in the economy.

[1] Source: Central Statistical Office (CSO)

[2] Source: World Bank

Analytical Contacts:

Stefan Fortuné

Tel: 1-868-627-8879 Ext. 228

E-mail: sfortune@caricris.com

Megan Dass

Tel: 1-868-627-8879 Ext. 239

E-mail: mdass@caricris.com

Website: www.caricris.com

E-mail: info@caricris.com

Sagicor Financial Company Limited

RATING DRIVERS

Supporting Factors

Leading market position in the Caribbean with continued growing market share in international markets
Financial performance negatively impacted by COVID-19 pandemic with a slight rebound in the 1st quarter of 2021
Good capitalization levels and adequate short-term liquidity metrics
Strong and effective Enterprise Risk Management (ERM) framework

Constraining Factors

Global economic uncertainty along with exposure to weak economic conditions in countries which SFC’s subsidiaries operate present significant downside risks to the profitability of SFC

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
An improvement in the creditworthiness of Jamaica where SFC derives more than 30% of its revenue

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

A significant change in capitalization, especially on account of future acquisitions resulting in the MCCSR falling to 175% or lower
A reduction in the creditworthiness of Jamaica where SFC derives more than 30% of its revenue
Substantial deterioration in consolidated financial performance, with a greater than 35% fall in premium income.
Decrease in Interest Coverage to <1.5X
Increase in Debt to Equity ratio to >75%

COMPANY BACKGROUND

Sagicor Financial Corporation Limited (SFCL) was formed with the demutualization of Barbados Mutual Life Assurance Society through an initial public offering on the Barbados Stock Exchange in 2002. The Group was redomiciled in Bermuda in 2016, and then, on December 5, 2019, Alignvest Acquisition II Corporation (Alignvest)^[1] acquired all the shares of SFCL. SFCL was renamed Sagicor Financial Company Ltd (SFC) and is now listed and traded solely on the Toronto Stock Exchange. This sale transaction resulted in approximately US $450 million in new capital being raised for the Group.

The Group operates now in 20 countries across the Caribbean, USA, and Latin America, offering through its subsidiaries, individual life, health and annuity products, group life and benefits administration, banking and investment management services, and property and casualty insurance, amongst other financial services. In 2020, its total revenue was derived from the United States of America (36%), Jamaica (31%), Trinidad and Tobago (14%), Barbados (10%), with other Caribbean territories (9%).

In September 2019, the Group issued a bond in two tranches, Tranche A – J $ 5.7 billion and Tranche B – US $31.8 million, carrying annual interest rates of 6.25% and 5.1% respectively. Both tranches had an original tenor of 13 months with fixed interest rates and a bullet repayment of principal upon maturity^[2]. Upon maturity on October 27^th, 2020, the bondholders consented to an extension request made by SFC to extend the maturity date by 18 months to April 2022. The repayment structure of the bond remains the same as originally issued with fixed interest rates and a bullet repayment of principal upon maturity in April 2022^[3]. Notably, the interest rate on Tranche A (J $) remained unchanged while the interest rate for Tranche B (US $) was revised to upward to 5.5%.

[1] A Toronto-based Special Purpose Acquisition Corporation (SPAC).

[2] The bond facilities were fully underwritten by Sagicor Investments Jamaica Limited, a fully owned subsidiary of Sagicor Group Jamaica and the Lead Arranger and Broker for the bonds.

[3] The bond matures on April 26th 2022 with an option of further extension.

Analytical Contacts:

Nadia Sanchez

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

E-mail: nsanchez@caricris.com

Anelia Oudit

Tel: 1-868-627-8879 Ext. 226

Mobile: 1-868-487-8364

E-mail: aoudit@caricris.com

Website: www.caricris.com

Email: info@caricris.com

Point Lisas Industrial Port Development Corporation Limited (PLIPDECO)

RATING DRIVERS

Supporting Factors

Continued strong market position in port operations and industrial real estate management in T&T enhanced by diversified product offering
Reliable earnings stream on the industrial estate attributed to a stable tenant base, notwithstanding high rental concentration
Comfortable financial performance in 2020 supported by adequate capitalization and debt protection metrics albeit at lower levels

Constraining Factors

Prevailing economic conditions constrain profitability and growth

Rating Sensitivity Factors

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

A greater than 10% 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 ratings and/or Outlook include:

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

COMPANY BACKGROUND

Point Lisas Industrial Port Development Corporation (PLIPDECO) was established in 1966. The Government of the Republic of Trinidad & Tobago (GoRTT) is its majority shareholder with 51%, with the other 49% being widely held by various institutional and individual investors as a listed public entity.

PLIPDECO’s two core activities are: 1) port management and operations, including cargo handling services, and 2) industrial real estate management.

Port Operations

PLIPDECO’s port operations entail handling a wide range of traffic including dry and liquid bulk, cargo containers, containerized and conventional general cargo^[1] and breakbulk, servicing both the business sector and individuals. The port consists of 6 general cargo and container berths. It covers an area of approximately 23.33 hectares and has a 10-year average annualized throughput of 182,000 twenty-foot equivalent units (TEUs)^[2] and 326,000 Metric Tons of breakbulk cargo per year^[3].

Industrial Real Estate Management

PLIPDECO is also the owner and landlord of the 863-hectare Point Lisas Industrial Estate. It comprises 103 tenants that include petrochemical companies, steel plants, manufacturing, and service companies.

[1] Includes non-oil bulk cargo and equipment.

[2]An inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals. It is based on the volume of a 20-foot-long (6.1m) intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks.

[3] For the 10-year period, 2011 to 2020.

Analytical Contacts:

Musa Abdullah

Tel: 1-868-627-8879 Ext. 233

E-mail: mabdullah@caricris.com

Anelia Oudit

Tel: 1-868-627-8879 Ext. 226

Mobile: 1-868-487-8364

E-mail: aoudit@caricris.com

Website: www.caricris.com

Email: info@caricris.com

The Beacon Insurance Company Limited

RATING DRIVERS

Supporting Factors

Continued stable financial performance
Healthy capitalization and strong reinsurance programme
Well diversified investment portfolio with satisfactory asset quality

Constraining Factors

High reliance on brokers poses a threat to earnings stability
Prevailing economic conditions constrain profitability and growth

Rating Sensitivity Factors

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

An improvement in market share of general insurance products in its largest market, T&T to 10% or more
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
Enhancement of Beacon’s risk management through the complete rollout of an enterprise risk management system
Increased profitability leading to an improvement in ROA and ROE to above 2.5% and 10% respectively for 2 consecutive financial periods

Factors that could, individually or collectively, lead to a lowering of the ratings and/ 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 under normal conditions

COMPANY BACKGROUND

The Beacon Insurance Company Limited (‘Beacon’ or ‘the Company’) was originally established in 1972 as the Caribbean Insurance Company Limited, before being rebranded in 1996. On May 7, 2018, Beacon agreed to the sale of 40% of its shareholding to Colonial Group International Limited (CGI) now known as Coralisle Group Limited, a Bermuda-based insurance company with commercial operations in Bermuda, the Cayman Islands, The Bahamas, the British Virgin Islands, Turks & Caicos Islands and Barbados. The transaction was approved by the Central Bank of Trinidad and Tobago on May 3, 2019 and led to a capital injection from all shareholders totalling TT $26.3 million in July 2019.

Beacon is now owned by CGH Limited (46%), CGI (40%), and an individual shareholder (14%). The Company is domiciled in Trinidad and Tobago (T&T) and has a regional presence through its Barbados, Grenada and Saint Lucia offices, and agency operations located in Dominica, Saint Kitts and Nevis, and Saint Vincent and the Grenadines. The Company specializes in general insurance, underwriting for both individual and institutional clients, and offers a broad product range comprised of Property, Motor, Accident and Casualty, Marine Cargo and Hull, Bonds, and Engineering insurance. The Company also provides Group Health and Group Life insurance targeted to institutional clients. The offering of all these products is made possible by Beacon’s composite insurance license which allows the Company to offer any type of insurance without obtaining additional licenses.

Analytical Contacts:

Nikkel Collymore

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

E-mail: ncollymore@caricris.com

Keith Hamlet

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

E-mail: khamlet@caricris.com

Website: www.caricris.com

Email: info@caricris.com

Sage Power Limited

RATING DRIVERS

Supporting Factors:

Stable and predictable revenue stream underpinned by long-term contracts with strategically important Jamaican entities
The underlying asset consists of a modern, efficient electricity and steam generating plant, with good operating efficiency
Adequate debt servicing capacity based on stable lease revenue
The transaction structure provides adequate protection to investors

Constraining Factors:

High leverage of Parent can hamper timeliness of financial support, if needed
Unproven track record of consistent plant performance

Rating Sensitivity Factors

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

Successful operations of the 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

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

Deterioration in the financial performance of NFE SPH which could possibly hamper lease payments.
Deterioration in the credit worthiness of the guarantor (NFE), impacting its ability to deliver in a timely manner any shortfall in lease payments if so required
Breach in contract from the O&M counterparty, Caribbean Blue Skies Energy, that may affect operations.
Any material litigation which may affect NFE SPH or NFE Inc
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

COMPANY BACKGROUND

New Fortress Energy Incorporated (NFE or the Parent)^[1], founded in 2014 in Delaware, USA, is a gas-to-power infrastructure business which focuses on converting existing power generation to run on natural gas, building new gas-fired power generation plants, operating downstream gas-to-power assets, and supplying such assets with natural gas. NFE is a publicly traded company on the NASDAQ exchange with a market capitalization of approximately US $8.6 billion^[2]. NFE has been operating in the region since 2016, having established an onshore storage and regasification facility in Montego Bay, Jamaica in 2016, an offshore floating storage and regasification facility in Old Harbour, Jamaica in 2019 and an onshore facility in San Juan, Puerto Rico in 2020 to supply on-island industrial, commercial and transportation customers with liquefied natural gas (LNG). Furthermore, NFE completed the acquisitions of Hygo Energy Transition and Golar MLP, totaling US $5 billion, significantly increasing NFE’s global portfolio of critical infrastructure assets. Currently, NFE has ten facilities operational or under active development. This global portfolio of assets positions NFE to acquire and supply LNG to customers in a number of attractive markets around the world. In 2016, NFE incorporated a subsidiary NFE South Power Holdings Limited (NFE SPH) in Jamaica to own a combined heat and power plant (CHP Plant) and associated permits, entitlements, operational agreements and commercial agreements.

Analytical Contacts:

Nikkel Collymore

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

E-mail: ncollymore@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

Email: info@caricris.com