CariCRIS reaffirms its good creditworthiness ratings

The Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed its rating assigned to the US$160 million bond issue of JMMB International Ltd (JMMBIL) foreign currency rating on the Jamaican national scale.

The scale, CariCRIS said in a release, is good since it indicates the level of creditworthiness of this obligation compared to other obligations in Jamaica. The rating includes a two-notch uplift for implied support from its parent company, JMMB Group Ltd (JMMBGL).

CariCRIS has also maintained a stable outlook on the ratings premised on the expectation that the improved credit risk profile of the Jamaican government over the last year following the removal of pandemic restrictions and will continue over the next 12-15 months. This may likely have a positive influence on the performance of JMMBIL, the release said.

JMMBIL is expected to continue to meet financial covenants associated with the US$160 million bond issue. CariCRIS said it expects dividends received from SFC will continue to contribute positively to the company’s liquidity and support debt servicing.

JMMBIL’s rating reflects its history of profitability, despite a 36 per cent decline to US$16.1 million in profit after tax for the nine months ending December 2022.

The company's rating also reflects its good asset returns, adequate capitalisation and liquidity and is further supported by its affiliation with the JMMBGL.

The full parental guarantee provided by JMMBGL to support debt servicing of the bond issue also supports the rating, the release said. But the ratings can be tempered by JMMBIL’s cash flows and exposure to the downside risks associated with the Jamaican economy.

CariCRIS gave some factors that could lead to an improved rating and/or outlook include: an improvement in the Jamaican government's credit rating over the next 12-15 months and in the credit rating of JMMB Group Ltd and growth in profit after tax and tangible net worth of 15 per cent or more for three consecutive years.

Factors that can lead to lowering of the ratings and/or outlook are: a deterioration in the Jamaican government's credit rating over the next 12-15 months; lowering of the ratings of JMMB Group Ltd; breach in any 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 –, decline in profit after tax and tangible net worth of 15 per cent or more for three consecutive years.