RATING ACTION:
On August 11, 2023, CariCRIS assigned initial issuer/corporate credit ratings of CariBBB+ (Local Currency Rating) and CariBBB (Foreign Currency Rating) on the regional rating scale, and jmA (Local Currency Rating) and jmA- (Foreign Currency Rating) on the Jamaica national scale for Cornerstone Financial Holdings Limited (CFHL or the Company). A stable outlook was assigned.
RATING SENSITIVITY FACTORS:
Factors that could, individually or collectively, lead to an improvement in the ratings and /or outlook include:
- An improvement in the credit risk profile of the Government of Jamaica over the next 12-15 months.
- An improvement in the credit risk profile of BIL over the next 12-15 months
- Further diversity in revenue streams and asset class through the completion of its restructuring exercise and/or addition of investment grade and above assets sustained over the next 2 years.
- Successful acquisitions over the next 12 to 15 months with a concomitant material improvement in the respective segment’s market share.
- Further enhancements to its overall corporate governance structure inclusive of independent directors on the Board.
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- A deterioration in the credit risk profile of the Government of Jamaica.
- A deterioration in the credit risk profile of BIL over the next 12-15 months.
- A significant decline in the performance of BIL resulting in a material and sustained fall in CFHL’s income that adversely impacts its risk absorbing capacity.
- Increase in the debt/TNW and total debt to total assets ratios over the internal limits of 2 times and 75% respectively.
- Inability of CFHL’s portfolio companies to meet capital adequacy regulatory requirements in the Jamaica financial services industry following its re-organization exercise.
Analysts’ Contact Info:
Anelia Oudit
Mobile : 1-868-487-8364
Jeffrey James