RATING ACTION:
On June 15, 2022, CariCRIS has reaffirmed the ratings currently assigned to the US $10 Million debt issue (notional) of Dominica Agricultural, Industrial and Development Bank (DAID or the Bank) at CariB (Foreign and Local Currency Ratings) on the regional rating scale. 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 upgrade to the sovereign credit rating of the GOCD
- Improvement in the NPL ratio to less than 16%
- Adherence to the EIB’s revised financial covenants
- Sustained profitable operations for more than 2 financial periods
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- A change in the sovereign credit rating of the GOCD
- Sustained NPL ratio of 45% or more over for the next 12 – 15 months
- Further delay in the full implementation of the Bank’s Enterprise Risk Management Framework
- Any loss of major funding lines without identification of a suitable alternative
- A decline in TNW coverage of net NPLs to less than 1 time over the next 12 – 15 months
- A fall in the Bank’s capital adequacy ratio to less than 25% over the next 12 – 15 months
RATING RATIONALE
Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the assigned ratings to the US $10 million debt issue (notional) of the Dominica Agricultural, Industrial and Development Bank (DAID or the Bank) to CariB (Foreign and Local Currency Ratings) on the regional rating scale. These ratings indicate that the level of creditworthiness of this notional debt obligation, adjudged in relation to other debt obligations in the Caribbean is weak.
CariCRIS has maintained a stable outlook on the ratings. The stable outlook is based on our expectation that there will be continued improvements in the Bank’s asset quality. The improvement is underpinned by the gradual easing of COVID-19 related movement restrictions in the Commonwealth of Dominica and an associated improvement in economic activity. This is expected to result in the Bank’s improved financial performance and improved asset quality. Additionally, the level of support that is being provided to the Bank through its Government shareholding and supportive lenders also supports the outlook.
Analysts’ Contact Info:
Keith Hamlet
Mobile: 1-868-487-8356
Khadine Tavares
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