CariCRIS reaffirms NIF $4b bond

The Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the credit ratings assigned to the $4 billion bond (Series B, C and D) of the National Investment Fund Holding Co Ltd (NIF).

In a release on July 8, CariCRIS said the NIF bond secured a CariAA rating on the regional scale and ttAA rating on the national scale.

"These ratings indicate a high level of creditworthiness of this debt obligation, adjudged in relation to other obligations in the Caribbean and within Trinidad and Tobago," CariCRIS said.

It also maintained a stable outlook on the ratings.

"The outlook is based on the expectation that the credit risk profile of NIF's underlying assets will remain stable over the next 12-15 months," it said.

CariCRIS added that the ratings are supported by the high credit quality of NIF’s assets, which consistently provide a steady flow of investment income (dividends) and adequate cash flows to cover interest payments.

"Given that the NIF is 100 per cent owned by the Government, there is the likelihood of support if needed" it added.

CariCRIS said these ratings are tempered by the discretionary nature of the NIF’s cash flows, primarily sourced from dividends.

Further, there remains a high concentration risk given that 83.2 per cent of the company’s core earnings were derived from two entities – Republic Financial Holdings Ltd and Trinidad Generation Unlimited – in 2023.

The NIF is a special-purpose investment company created by the Government to monetise its assets.

In 2023, the company reported a loss of $2 billion. The loss resulted in a decline in its equities from $6.2 billion in 2022, to $4.6 billion in 2023.

NIF said this was due to significant investments in five major local companies – Angostura Holdings Ltd, One Caribbean Media Ltd, Republic Financial Holdings Ltd, Trinidad Generation Ltd and West Indian Tobacco Co Ltd (Witco).

It invested $126.4 million in Angostura, $702.4 million in Republic, $165 million in Witco and $1.12 billion in Trinidad Generation.