CariCRIS reaffirms ‘high creditworthiness’ for UTC

Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the credit rating of CariAA on the regional and ttAA on the national rating scale to TT Unit Trust Corporation (UTC).

CariCRIS said these ratings indicate a high level of creditworthiness, adjudged in relation to other obligors in TT and the wider Caribbean.

It also maintained a stable outlook on the ratings.

"The stable outlook is based on the high likelihood that over the next 12 to 15 months, UTC will experience a turnaround in profitability underpinned by increased management charge income from growth in Funds Under Management (FUM).

"The continued focus on regional and product expansion is expected to positively impact the corporation’s income.

"Profitability is, however, expected to be tempered by an increase in expenses as UTC intends to implement new technological projects," CariCRIS said.

UTC is expected to remain well-capitalised with a strong liquidity position.

CariCRIS said UTC's ratings reflect the importance of the mutual funds industry to the economy, as well as the corporation’s market position as the largest mutual funds provider in TT.

It added that UTC's investment portfolio continues to be well managed, with good asset quality and healthy investment returns which continues to support the corporation’s profitability.

"UTC's strong risk management practices support an overall improvement in operating efficiency and underpin the ratings."

These rating strengths, however, are tempered by the existing legislation which could limit the corporation’s growth.

Also constraining the rating is UTC's aging unitholder base which could impact long-term growth, CariCRIS said.