RATING ACTION:
On June 28, 2024, CariCRIS reaffirmed the Bond Issue Credit Rating assigned to the J $1 billion bond issue of Poly Pet Company Limited (Poly Pet or the Company) at jmBB- (Local Currency Rating) on the Jamaica national scale. A stable outlook was maintained.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement of the ratings and/ or outlook include:
- Sustained profitability for more than 2 financial years (based on audited accounts)
- Improvement in the Company’s debt service coverage ratio (DSCR) to over 1 time sustained for more than 2 financial years (based on audited accounts)
- Improvement in Poly Pet’s debt to net shareholder’s equity ratio to below 2 times sustained for 2 financial periods (based on audited accounts)
- Sustained compliance with bond financial covenants for more than 2 financial periods (based on audited accounts)
Factors that could, individually or collectively, lead to a lowering of the ratings and/ or outlook include:
- A greater than 10% decline in operating revenue for 2 consecutive years
- A net increase in intercompany balances by 5% over the next 12 months
- Continued breach of covenants stipulated in the final term sheet/prospectus for the bond offering
- Changes in environmental laws and regulations toward reducing plastic use in Jamaica
- Material deviation of Poly Pet’s audited financial accounts for June 2023 from management accounts presented, resulting in lower profitability and cash flow adequacy metrics
- Overall equipment effectiveness (OEE) less than 65% or failure to fulfil production contracts in the 9 months ended March 2025
- Inability to refinance the bond’s principal when it becomes due in 2025
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-8356
[email protected]
Maxwell Gooding
[email protected]
www.caricris.com
[email protected]
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