CariCRIS reaffirms ratings for Home Mortgage Bank

Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the overall issue rating currently assigned to the $200 million collateralised mortgage obligation (CMO) of Home Mortgage Bank (HMB) of ttA+ (SO) on the national scale.

In a release, CariCRIS said these ratings indicate a good overall level of creditworthiness of this structured debt obligation, adjudged in relation to other rated debt obligations in the Caribbean and within TT.

It also assigned a stable outlook on the ratings.

"The stable outlook is premised on CariCRIS’ expectation of continued good economic conditions in TT, which is expected to largely benefit businesses and households. Thus, over the next 12-15 months, continued stability of CMO's overall credit risk is anticipated with a slight improvement in asset quality," it said.

According to the release, the ratings reflect the simple transaction structure, with an effective built-in credit enhancement and a legal and regulatory framework which provides adequate protection to investors.

Further supporting the ratings are the continued good underwriting practices from the TT Mortgage Finance Company Ltd (TTMF), the Mortgage Originator and the good credit quality of the securitised mortgage pool, with some notable improvements in non-performing loans, despite still elevated delinquency levels.

CariCRIS said these supporting factors are tempered by the mortgage pool seasoning, which could increase default risk.

The CMO is a structured finance debt instrument issued by the HMB to securitise residential mortgage assets purchased from the TTMF on the secondary market.

It offers participation certificates in nine tranches for $200 million.