RATING DRIVERS

Supporting Factors

• Good financial performance underpinned by good income diversity and efficiency levels, notwithstanding some deterioration in 2020
• Comfortable risk-adjusted capitalization level reflected in strong capital adequacy ratios and good coverage of total assets
• Good asset quality underpinned by a diverse investment portfolio supported by sound risk management practices
• Sound asset-liability management practices contribute to an overall strong liquidity profile
• Sound risk management practices support strategic objectives

Constraining Factors

• High reliance on institutional funding, though declining

Rating Sensitivity Factors

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

• Improving business conditions over the next 12-15 months, resulting in ROA of above 3% and ROE of above 8%
• Management of its funding concentration risk such that less than 50% of its funding is derived from BSL’s top 10 clients over the next 12-15 months

 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}

COMPANY BACKGROUND

Bourse Securities Limited (BSL or the Company) was founded in 1995 in Trinidad and Tobago (T&T) and is privately owned. BSL is a registered broker-dealer, underwriter and investment advisor registered with the Trinidad and Tobago Securities and Exchange Commission (TTSEC). The Company offers a range of products and services, including mutual fund management, securities brokerage, securities underwriting, wealth management, investment advisory services as well as the provision of short-term fixed return investment products such as repurchase agreements. BSL has three (3) branches across T&T, with locations in Chaguanas, Port of Spain and San Fernando.

BSL’s suite of products includes TTD and USD Mutual Funds including its flagship SavInvest India Asia Fund (SIAF), SavInvest Individual and Group Retirement Funds, and Repurchase Agreements. BSL also extends the service of Bond Brokerage and Wealth and Portfolio Management.

The Company currently holds four (4) wholly owned subsidiaries namely: Bourse Brokers Limited (BBL) – a member of the Trinidad and Tobago Stock Exchange (TTSE) and the stockbroking arm of the business, Bourse International Asset Management (BIAM) – an international business corporation (IBC) domiciled in St. Lucia primarily focused on asset management, Windsor Investments Limited incorporated in St. Lucia on December 27, 2018 and Alkene Development Company of Trinidad & Tobago (ADCOTT), with a focus on research and development.

Analytical Contacts:

Megan Dass

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

E-mail: mdass@caricris.com

Keith Hamlet

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

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

• Competitive advantage lies in its affiliation with the NCB Financial Group
• Good financial performance supported by continued profitability
• Continued good asset quality notwithstanding a slight deterioration in the NPL ratio, it remains below that of the local industry
• Comfortable capitalisation reflected in strong capital adequacy ratios and low leverage
• Stable funding base, though small, adequately supports operations

Constraining Factors

• Small player in a highly competitive market
• Asset/ Liability maturity mismatch heightens short-term liquidity and refinancing risks

• Small player in a highly competitive market
• Asset/ Liability maturity mismatch heightens short-term liquidity and refinancing risks

Rating Sensitivity Factors

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

• The successful rollout of the Company’s income rebalancing strategy leading to a greater contribution to total income from its Retail and Business Banking Division to over 40%
• A reduction in the reliance on institutional funding to under 50%
• Sustained increase in profitability of 10% over the next 3 years

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

• Declining asset yields or rising funding costs, leading to a material contraction in spread income to below 1% over the next year
• A systematic increase in liquidity pressures in the environment, leading to funding withdrawals in excess of 50% from large institutional investors, and a worsening of short-term TT$ liquidity measures over an 18-month period
• Deterioration in the Parent’s (NCBCML) credit rating that could materially impact the extent of credit support available to NCB Merchant

• •  
  • COMPANY BACKGROUND

     NCB Merchant Bank (T&T) Limited (“NCB Merchant or the Company”) (formerly NCB Global Finance Limited or NCBGF) was incorporated in the Republic of Trinidad and Tobago on 5 November 1982 and commenced operations in January 1983 as AIC Finance Limited. Effective 11 August 1993, the Company was licensed as a financial institution under the Financial Institutions Act 1993, to conduct the following classes of business: finance company, confirming house/ acceptance house, leasing corporation, and mortgage institution. On 26 August 2003, the Company was licensed by the Central Bank of Trinidad & Tobago (CBTT) as a merchant bank and thus permitted to engage in foreign exchange dealing.

     Analytical Contacts:

  •  Keith Hamlet

     Tel: 1-868-627-8879 Ext. 229

     E-mail: khamlet@caricris.com

     Maxwell Gooding

     Tel: 1-868-627-8879 Ext. 229

     E-mail: mgooding@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

• Strategic importance to the Government of Jamaica in the divestment of state assets and the allocation of capital to strategic investments
• Strong capital base supported by healthy capital adequacy ratio and good liquidity metrics
• Sound risk management framework supports strategic planning and business processes
• Comfortable financial performance as evidenced by continued profitability and asset growth albeit at lower levels

 Constraining Factors

• High sovereign risk exposure with an elevated level of economic uncertainty

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
• Increase in ROA in excess of 3.5%, sustained over a 3-year period

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 150bps
• A lowering of the creditworthiness of Jamaica

Development Bank of Jamaica Limited (DBJ) is a limited liability company domiciled in Jamaica and 100% owned by the Government of Jamaica (GOJ). It was formed on April 1, 2000, from the merger of the operations and selected assets and liabilities of the National Development Bank of Jamaica Limited and the Agricultural Credit Bank of Jamaica Limited. DBJ expanded further on September 1, 2006, when it took over the operations and selected assets and liabilities of the National Investment Bank of Jamaica Limited. DBJ has a 50% shareholding in Harmonization Limited, a property development company.

DBJ’s mandate is to facilitate economic growth and development in Jamaica by providing:

• Appropriate medium and long-term developmental financing solutions, particularly to micro, small and medium-sized enterprises through alliances with Approved Financial Institutions (AFIs) and Micro Finance Institutions (MFIs)
• Direct lending to strategic projects identified for their economic growth potential
• Management oversight of the Government’s Privatization and Public-Private Partnerships Programme and transactions
• An ecosystem conducive to venture capital as well as serving as an anchor investor in venture capital funds that operate in Jamaica.

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

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

• Affiliation with the JMMB Group supports the growth and sustainability of JMMBIL
• Parental Guarantee to support debt servicing if needed
• Continued good financial performance underpinned by good asset returns
• Favourable resource base and adequate capitalization

Constraining Factors

• Structural subordination of cash flows and refinancing risk may apply given the bond’s structure
• Exposure to the downside risks of the Jamaican and Trinidad and Tobago economy

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 parent JMMB Group Limited

Factors that could, individually or collectively lead to a lowering of the Ratings and/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 parent JMMB Group Limited
• A deterioration below the regulatory requirements for all operating subsidiaries in their respective jurisdictions as determined by their regulators

JMMB International Limited (JMMBIL or the Company) was initially incorporated and domiciled in St. Lucia and was redomiciled in Barbados in February 2021. The Company is a wholly owned subsidiary of JMMB Group Limited (JMMBGL or the Group). JMMBIL forms part of the investment management arm of the JMMB Group and currently holds a portfolio of (long term value) investments, mainly comprising of Government of Jamaica (GOJ) bonds and corporate bonds.

In June of 2020, JMMBIL issued a bond in the amount of US $120 million, in 2 equal tranches of US $60 million each, maturing in June 2023 and June 2025. The bond issue facilitated the direct transfer of 22.5[1]% equity ownership of Sagicor Financial Company (SFC)^[2] to JMMBIL from JMMBGL, with the bond issue being fully guaranteed by JMMBGL^[3]. Each tranche is being serviced through semi-annual interest payments, with principal repayments to be made be by way of bullet payments upon the maturity of each tranche. This transaction was executed as a non-cash transaction and was fully subscribed. Following the transaction, the ownership of SFC shares accounts for around 57% of JMMBIL’s overall earning assets portfolio.

Over the next 12 months, JMMBGL intends to apply for a securities dealing license for JMMBI in Barbados, where it is currently domiciled. This will allow JMMBGL to execute its regional growth ambitions and further diversify its revenues.

[1] Stake held in SFC has subsequently increased to 22.73% due to share buy backs

[2] Sagicor Financial Company (SFC) is rated CariAA by CariCRIS Limited

[3] JMMB Group Limited (JMMBGL) is rated jmA+ (Local Currency Rating) and jmA (Foreign Currency Rating) on the Jamaica national scale.

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

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

• Moderate diversification and good market position in the Jamaican banking sector
• Strong capitalization of regulated subsidiaries in excess of regulatory requirements
• History of profitable operations underpinned by diverse income streams
• Adequate liquidity to support debt servicing
• Good governance structure and risk management practices

Constraining Factors

• High cost to income ratio
• Sluggish economic conditions could constrain revenue growth and profitability

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 increased in PAT of 10% for more than 2 years
• An increase in the credit rating of the Government of Jamaica

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

• A greater than 10% decline in total income for 2 consecutive years
• A lowering of the credit rating of the Government of Jamaica
• Breach of covenants stipulated in the final term sheet/prospectus for the bond offering
• Failure of JN Bank to meet its debt servicing and repayment obligations to JN Group in a timely manner.

The Jamaica National Group Limited (JN Group or the Company), a holding company, was incorporated in Jamaica in February 2017. The Company’s subsidiary (JN Bank) commenced operations as the Westmoreland Building Society in 1874. In 1960, the Westmoreland Building Society completed its first merger with the Manchester Mutual Building Society. In 1970, following several mergers, the Westmoreland Building Society executed several organisational adjustments including a name change to the Jamaica National Building Society (JNBS or the Building Society). In 2016, the members of JNBS voted to reorganize the entity into the JN Group and convert the deposit-taking arm of the Building Society to Jamaica’s only mutually owned (fully owned by savers and borrowers) commercial bank and the third-largest commercial bank in Jamaica, the JN Bank (the Bank). The Bank of Jamaica subsequently exchanged JNBS’ building society license for a commercial banking license and following the reorganization of the JN Group, a mutual holding company, named The Jamaica National Group, became the parent company for the JNBS subsidiaries.

The Company holds 100% ownership in MCS Group Limited (a non-financial holding company) and JN Financial Group Limited^[1] (a financial holding company). The Group comprises 13 subsidiaries, 2 associated companies, and 1 related company in Jamaica, the United Kingdom (UK), Canada, the United States of America (USA), and the Cayman Islands (Chart 1). The Group’s portfolio of products and services span a wide array of financial, technological, creative, and fleet management services that positions the Group as a leading performer among mixed conglomerates in the region.

The Group’s total assets stood at J $269.7 billion^[2] as at March 2021 and revenue recorded for the year ended March 2021 was J $22 billion. The Group’s largest subsidiary, JN Bank (the Bank), domiciled in Jamaica, accounts for approximately 79.6% and 57%^[3] of JN Group’s total assets and revenue respectively. The Bank offers a wide range of products and services including personal loans, mortgages, credit cards, lines of credit, commercial loans, chequing accounts, and a range of short, medium, and long-term savings accounts. The Company remains focused on its diversification initiatives and deploying efforts to standardize, centralize, and integrate operations across all entities within the Group. Further, the Company also intends to continue to grow its banking business line to diversify and reduce the cost of its funding.

[1] The Subsidiaries consist of JN Bank Limited, JN General Insurance Company Limited (JNGI), JN Fund Managers Limited (JNFM), JN Life Insurance Company Limited (JN Life), JN Money Services Limited, JN Small Business Loans Limited (JNBSL), JN Cayman Limited, and JN Bank UK Limited.

[2] Total assets have been adjusted to exclude intangible assets, unrealized gains/(losses), and contingencies.

[3] On a consolidated basis.

Analytical Contacts:

Kathryn Budhooram

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

E-mail: kbudhooram@caricris.com

Keith Hamlet

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

E-mail: khamlet@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.

RATING DRIVERS

Supporting Factors

• Monetary and exchange rate stability underpinned by membership in a quasi-currency board arrangement
• Sound financial sector despite COVID-19 challenges
• Economic activity is broad-based although dependent on COVID-ravaged tourism; moderate GDP strengthening is expected in coming years

Constraining Factors

• COVID-19 has worsened GOSL’s fiscal position and significantly increased indebtedness
• International reserves under pressure; however, external debt servicing expected to be adequate

Rating Sensitivity Factors

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

• Substantial changes in the debt levels leading to a debt to GDP ratio below 65%
• Achievement of a balanced budget over the medium term
• Sustained GDP growth of the order of 3% per annum or more (above pre-COVID-19 level)

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

• Significant changes in the fiscal position leading to a deficit larger than 15% of GDP
• Substantial changes in the debt levels leading to sustained debt to GDP in excess of 90% alongside a decline in debt servicing to 2 times

Saint Lucia, “Helen of the West Indies”, is situated in the Eastern Caribbean, at the northern end of the Windward Island chain. The total area of Saint Lucia is approximately 616 km² (238 square miles). Total population is estimated at 181,192^[1], with a plurality of persons living around the capital, Castries. Average life expectancy is 75.7 years. Infant mortality was estimated at 12.7 deaths per 1,000 live births in 2015. The official language is English, but French patois (Kwéyòl) is widely spoken.

Tourism is the mainstay of the economy with the main markets being the United States of America (USA), the United Kingdom (UK), the Caribbean and Canada. Agriculture, specifically bananas, also plays a significant role in employment within the economy. There is a small manufacturing sector which is the most diverse in the Eastern Caribbean. The sector is involved in the production of food & beverage, paper products, the assembly of electronic components and agro-processing.

[1] Ministry of Finance, Economic Growth, Job Creation, External Affairs, and the Public Service – Economic & Social Review, 2020

Analytical Contacts:

André Joseph

Tel: 1-868-627-8879 Ext. 224

E-mail: ajoseph@caricris.com

Stefan Fortuné

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

E-mail: sfortune@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.

RATING DRIVERS

Constraining Factors

• Small developing country with significant capacity constraints
• Weaknesses in the financial sector, particularly the non-bank financial institutions
• Fiscal recovery hampered by COVID-19

Supporting Factors

• External position remains solid, despite exports decline
• GDP, supported by CBI inflows and continued post-hurricane rebuilding, is expected to rebound quickly from COVID-19
• Stable political environment

Rating Sensitivity Factors

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

• Growth in economic activity of 5% or more above pre-Hurricane Maria levels, sustained for at least 3 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 and/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

Dominica is an island-nation located in the Eastern Caribbean with a total population estimated at approximately 71,000^[1] persons. The official language is English but French patois is also spoken. The primary economic sectors are agriculture, government services and wholesale & retail trade. Dominica is mountainous and volcanic with tropical rainforest covering two thirds of the island.

Dominica has experienced to two major natural disasters in recent years: Tropical Storm Erika (2015) and Hurricane Maria (2017). Hurricane Maria delivered a devastating blow while the country was still consumed with rehabilitation efforts following Tropical Storm Erika. The destruction caused by these two natural disasters – Tropical Storm Erika (90% of GDP) and Hurricane Maria (298% of GDP) – though severely removing productive capacity, has spurred construction activity and gives opportunity to put in place greater climate resilient infrastructure.

[1] According to the World bank estimates as at 2019.

Analytical Contacts:

André Joseph

Tel: 1-868-627-8879 Ext. 224

Mobile: 1-868-788-4693

E-mail: ajoseph@caricris.com

Stefan Fortuné

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

E-mail: sfortune@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.

RATING DRIVERS

Supporting Factors

• The Group’s wide geographic and industry diversity serves to temper the impact of revenue volatility

Constraining Factors

• Materially reduced profitability metrics over the past year driven mainly by the impact of the COVID-19 pandemic
• Continued low debt protection metrics
• Significant sovereign risk exposure in economies in which GEL operates alongside uncertainties in the global economic environment are likely to present key downside risks to the operations and profitability of the Group

Rating Sensitivity Factors

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

• An improvement in the effective DSCR to more than 2.0 times for 2 consecutive years.
• Revenue increases by more than 10% per annum for 2 consecutive years.

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

• A decline in the effective DSCR to less than 1 time for 2 consecutive years.
• A decline in revenue of more than 20% per annum for 2 consecutive years due to the challenging economic conditions in GEL’s main markets.
• End of year financial performance that is materially lower than that projected by CariCRIS

Incorporated in 1921, Goddard Enterprises Limited (“GEL” or “the Group”), started with the opening of a meat and grocery store in Bridgetown by Joseph Nathaniel Goddard and his son, Victor. This family-run business was converted into a public company in 1978, with the Goddard family retaining a majority shareholding (64%). GEL is now the fourth-largest conglomerate (by assets) operating in Barbados. As of September 2020, it comprised 78 subsidiaries and 33 associated companies employing over 4,700 persons. Its operations, which are spread over 24 industries and 25 countries throughout the Caribbean and Latin America are classified into 4 divisions; namely: (i) automotive, building supplies and services, (ii) manufacturing and services, (iii) catering and ground handling services, and (iv) Caribbean Distribution Partners Limited (CDP^[1]).

[1] CDP is a group of 6 Fast Moving Consumer Goods (FMCG) distribution companies operating in Trinidad and Tobago, Barbados, Grenada, St. Vincent and the Grenadines, Saint Lucia, and Guyana. CDP is owned by the Agostini Group and GEL through a 50:50 joint venture arrangement.

Analytical Contacts:

André Joseph

Tel: 1-868-627-8879 Ext. 224

Mobile: 1-868-788-4693

E-mail: ajoseph@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.

Caribbean Information & Credit Rating Services Limited (CariCRIS), the region’s credit rating agency, wishes to inform the public of the withdrawal of the issuer/corporate credit ratings and outlook for Goddard Enterprises Limited (GEL), which were last reviewed and reported on by CariCRIS on June 16, 2021.

These ratings were withdrawn following CariCRIS’ receipt of notice from GEL on April 9, 2020. As a result, these ratings will no longer be kept under surveillance and as such there will be no further updates on these ratings.

June 28, 2021

RATING DRIVERS

Supporting Factors:

• Strong market position as the largest credit union in Trinidad and Tobago with growing asset base and membership
• Good financial performance as evidenced by continued profitability and asset growth albeit at lower levels

Constraining Factors:

• High non-performing loan levels with rising delinquency
• Room for improvement in risk management, though strides were made over the last year
• Challenging economic environment with increased competitive pressures present significant downside risks to the local credit union industry and the profitability of Eastern Credit Union

Rating Sensitivity Factors

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

• A decline in operating expenses leading to a cost to income ratio of under 50% over 2 consecutive years
• A decline of the NPL ratio to <6% for 2 consecutive years

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

• An increase in operating expenses leading to a cost to income ratio of over 70% over 2 consecutive years
• NPL ratio remains above 12% in next financial year
• A deterioration in the credit rating of the sovereign over the next 12-15 months thereby leading to further weakening of ECU’s asset quality metrics

Eastern Credit Union Co-operative Society Limited (ECU) was established in Trinidad and Tobago (T&T) in April 1973 under the Co-operative Societies Act. Membership in ECU, which is open to all nationals of T&T, exceeded 201,000 persons as at December 2020.

The credit union offers a range of products and services including savings accounts, fixed deposits, consumer loans, mortgages and business loans. ECU also owns 100% of a real estate management and development company, Eastern Properties Limited (EPL). EPL’s services include the La Joya Executive Suite rental, event venue rentals, sporting complex, facilities management, custodial services and property management.

Analytical Contacts:

André Joseph

Tel: 1-868-627-8879 Ext. 224

Mobile: 1-868-788-4693

E-mail: ajoseph@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.