RATING ACTION:
On March 20, 2023, CariCRIS assigned initial ratings of CariAA- (Foreign and Local Currency Ratings) on the regional rating scale and gyAAA on the Guyana national scale (Foreign and Local Currency Rating) to the proposed debt facilities of up to US $33.7 million of Guyana Shore Base Incorporated (GYSBI). 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:
- Successful operations of GYSBI over the next 2 years, leading to PAT improving by 15% or more annually.
- A reduction in client concentration risk where a single client will not account for more than 50% of the Company’s revenue, sustained for 2 financial years.
- An improvement in the sovereign risk profile of the Government of Guyana.
Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:
- Breach of any of the debt covenants
- Failure to satisfy any of the performance requirements of the contractual agreement with EEPGL.
- A material reduction in GYSBI’s labor and plant efficiency metrics, which would lead to an increase in GYSBI’s operating expenses.
- Failure of GYSBI to meet EEPGL’s KPIs stipulated in the 11-year contract.
- A reduction in services provided to EEPGL leading to revenue declines of more than 15% for 2 consecutive years.
- An increase in debt leading to increased leverage of above 3.5 times sustained for 2 financial periods.
- An increase in debt servicing requirements, leading to a decrease in effective DSCR to below 1.25 times sustained for 2 financial years.
- A reduction in services provided to EEPGL leading to revenue declines of more than 15% for 2 consecutive years.
Analysts’ Contact Info:
Keith Hamlet
Mobile : 1-868-487-4356
Sultan Mohammed
Mobile : 1-1868-362-7304
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