A Sagicor subsidiary is among five companies in Jamaica that have had their ratings placed on watch, following the announcement of a domestic debt exchange programme in that country.
As it did after the first debt exchange programme in 2010, the region’s credit rating agency Caribbean Information & Credit Rating Services Limited (CariCRIS) put its rated entities in Jamaica on “Ratings Watch – Developing”: Sagicor Life Jamaica Limited, Sagicor Investments Jamaica Limited (formerly Pan Caribbean Financial Services Limited), National Commercial Bank Jamaica Limited, and NCB Capital Markets Limited.
This time around another CariCRIS-rated entity, the Development Bank of Jamaica Limited, was added to the list.
The move indicates that the debt-exchange programme could affect the credit quality of the issuer/issue, the impact of which cannot be accurately assessed at this time.
“The exchange offer transaction is likely to have varying degrees of impact on the profitability, capital adequacy, asset quality and asset values of our rated financial institutions in Jamaica. Furthermore, the ratings of these entities are linked to the rating of the Government of Jamaica,” the agency said in a statement.
CariCRIS stressed that placing a rating on watch does not imply that the rating will necessarily change.
“We are closely monitoring developments in Jamaica and the likely impact of the debt exchange on the creditworthiness of each of the above entities and will revert to the market accordingly,” it said.
Several months after placing the companies on rating watch in 2010, CariCRIS removed them and reaffirmed the assigned ratings. That followed an evaluation of the consequences for the companies’ financial performance associated with the concluded debt exchange.
The debt swap announced last week by Jamaica’s Prime Minister Portia Simpson Miller also prompted international credit rating firms Standard & Poor’s and Fitch Ratings to downgrade the country’s sovereign credit ratings. (PR/DP)
