RATING DRIVERS
Supporting Factors
- Affiliation with the JMMB Group supports the growth and sustainability of JMMBIL
- Parental Guarantee to support debt servicing if needed
- Continued good financial performance underpinned by good asset returns
- Favourable resource base and adequate capitalization
Constraining Factors
- Structural subordination of cash flows and refinancing risk may apply given the bond’s structure
- Exposure to the downside risks of the Jamaican and Trinidad and Tobago economy
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the Ratings and/or Outlook include:
- An improvement in the GOJ’s credit rating over the next 12-15 months
- An improvement in the credit rating of JMMBIL’s parent JMMB Group Limited
Factors that could, individually or collectively lead to a lowering of the Ratings and/or Outlook include:
- A deterioration in the GOJ’s credit rating over the next 12-15 months
- A lowering of the ratings of JMMBIL’s parent JMMB Group Limited
- A deterioration below the regulatory requirements for all operating subsidiaries in their respective jurisdictions as determined by their regulators
COMPANY BACKGROUND
JMMB International Limited (JMMBIL or the Company) was initially incorporated and domiciled in St. Lucia and was redomiciled in Barbados in February 2021. The Company is a wholly owned subsidiary of JMMB Group Limited (JMMBGL or the Group). JMMBIL forms part of the investment management arm of the JMMB Group and currently holds a portfolio of (long term value) investments, mainly comprising of Government of Jamaica (GOJ) bonds and corporate bonds.
In June of 2020, JMMBIL issued a bond in the amount of US $120 million, in 2 equal tranches of US $60 million each, maturing in June 2023 and June 2025. The bond issue facilitated the direct transfer of 22.5[1]% equity ownership of Sagicor Financial Company (SFC)[2] to JMMBIL from JMMBGL, with the bond issue being fully guaranteed by JMMBGL[3]. Each tranche is being serviced through semi-annual interest payments, with principal repayments to be made be by way of bullet payments upon the maturity of each tranche. This transaction was executed as a non-cash transaction and was fully subscribed. Following the transaction, the ownership of SFC shares accounts for around 57% of JMMBIL’s overall earning assets portfolio.
Over the next 12 months, JMMBGL intends to apply for a securities dealing license for JMMBI in Barbados, where it is currently domiciled. This will allow JMMBGL to execute its regional growth ambitions and further diversify its revenues.
[1] Stake held in SFC has subsequently increased to 22.73% due to share buy backs
[2] Sagicor Financial Company (SFC) is rated CariAA by CariCRIS Limited
[3] JMMB Group Limited (JMMBGL) is rated jmA+ (Local Currency Rating) and jmA (Foreign Currency Rating) on the Jamaica national scale.
Analytical Contacts:
Nikkel Collymore
Tel: 1-868-627-8879 Ext. 240
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
E-mail: [email protected]
Website: www.caricris.com
Email: [email protected]
Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.