RATING ACTION:
On May 31, 2022, CariCRIS assigned initial issue ratings of CariAA- (Foreign and Local Currency Ratings) on the regional rating scale, and ttAA- on the Trinidad and Tobago (T&T) national scale to the proposed bond issue of up to TT $100 million of Development Finance Limited (DFL 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:
- Improvement in the credit rating of the GORTT
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- Material impairment in any of the underlying securities
- Substantial deterioration in the financial performance and position of DFL
- Downgrade in the rating of the GORTT
- Breaches to any of the bond’s covenants
- Breach of covenants related to other long-term borrowings including limits related to non-performing loans
- A fall in the bond’s security coverage to below 1.0X
COMPANY BACKGROUND
Development Finance Limited (DFL or the Company) is a non-bank financial institution licensed in Trinidad and Tobago (T&T) under the Financial Institutions Act (2008) and is registered with the Deposit Insurance Corporation. The Company was initially established as the Trinidad and Tobago Development Finance Company (TTDFC) in the 1970s. DFL’s major shareholders currently comprise of the Government of the Republic of Trinidad and Tobago (GORTT) (49.75%) and the Maritime Financial Group (49.75%), through its subsidiaries, the Maritime General Insurance Company Limited (33.17%) and Maritime Life (Caribbean) Limited (16.58%). The remaining 0.5% is held by DFL Caribbean Holdings Limited.
DFL’s mandate is aimed at providing funding and project structure for all small, medium, or large corporations that are engaged in development activities that can benefit the growth of the T&T economy. From inception in the 1970’s, DFL’s core business was to provide financing for business development to Small and Medium Enterprises (SMEs) locally. Since 2011 the Company has widened its product offering to include Merchant banking and FOREX services in addition to long-term commercial financing options. The Company’s products and services are offered through 6 main business lines which include debt arrangement and underwriting, buying and selling of foreign exchange, deposit-taking for fixed deposits, corporate and commercial lending for various financing needs, provision of guarantees, and letters of credit. DFL’s total assets stood at TT $860.6 million as at December 2021, and its total revenue for the year ended December 2021 was TT $22.8 million.
Analysts’ Contact Info: