CariCRIS reaffirms DFL $63.3m bond

The Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the credit ratings of CariAA- on the regional and ttAA- on the national scale to the $63.3 million bond issue of Development Finance Ltd (DFL).

In a release, CariCRIS said these ratings indicate a high level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean and TT.

It added that the assigned ratings include a four-notch credit uplift owing to the bond's being fully secured by Government and government-guaranteed securities.

CariCRIS also assigned a stable outlook on the ratings.

"The stable outlook is premised on the expectation that DFL would maintain its key credit drivers over the next year, with all debt service commitments being paid in a timely manner over the next 12-15 months. This is supported by the continued high quality of the bond’s underlying assets in addition to DFL’s sizeable cash and investment portfolio, which serve as sufficient buffers against downside risks," the release said.

It added that the expansion of the company's operations, alongside generally good economic conditions in TT, is expected to support DFL’s performance in 2024.

"The ratings are led by the high credit quality of the bond’s underlying assets, which lends to stable and reliable cash flows for debt servicing as well as DFL’s comfortable capitalisation, despite some weakening.

" The ratings are further supported by the company’s good financial performance, moderately diversified investment portfolio with good asset quality and stable and growing funding base," CariCRIS said.

It noted, however, that these factors are constrained by the significant sovereign risk exposure, notwithstanding generally good economic conditions.

DFL is a non-bank financial institution licensed in TT under the Financial Institutions Act (2008) and registered with the Deposit Insurance Corporation.

The company was initially established as the TT Development Finance Company (TTDFC) in the 1970s.

DFL’s shareholders currently comprise primarily the Maritime Financial Group (50.25 per cent) and Government (49.75 per cent).