RATING DRIVERS
Supporting Factors:
- Adequate financial performance supported by growing revenue and profits
- Consistent asset growth supported by moderately diversified interest-earning assets with good asset quality.
- Adequate governance structure and risk management
- Generally favorable capitalization and liquidity levels, but high cost of funds
Constraining Factors:
- Small size may hamper growth potential
- Exposure to sovereigns with an elevated level of economic uncertainty increases risk to SCI
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
- Improving business conditions over the next 12-15 months, thereby leading to growth in client base and sustained earnings growth
- SCI’s ability to attract and retain lower cost funding
Factors that could, individually or collectively, lead to a lowering of the ratings and/or Outlook include:
- Deterioration of asset quality ratio to 8% or more
- Increase of SCI’s debt to TNW ratio to over 1.25 times
- Cost to Income ratio weakens to 75% and over
- A sustained decrease in yield from interest earning assets by over 100 basis points or greater over the next 12-15 months, thereby leading to a significant tightening of the net interest spread earned on investments
- A deterioration in the GOJ’s credit rating over the next 12-15 months
COMPANY BACKGROUND
Sygnus Credit Investments Limited (SCI or the Company) is a specialty Private Credit Investment Company incorporated in Saint Lucia in January 2017 under the International Business Companies Act 1999. The Company is listed on the Jamaican Stock Exchange (JSE), in the main US and JA dollar markets, following the completion of an Initial Public Offering (IPO) in 2018 with an Additional Public Offering (APO) completed in 2020. Following SCI’s listing, the Company became subject to all laws applicable to issuers of securities in Jamaica listed on the stock exchange, as well as the regulatory authority of the JSE, the Financial Services Commission and the Companies Office. The largest single shareholder of SCI is ATL Group Pension Fund Trustees Nominee Limited, which currently holds 4.6% of SCI’s total shareholding as at June 2021.
SCI has no direct employees as its SCI’s investment activities are managed and administered by its Investment Manager, Sygnus Capital Limited (SCL)[1] (Chart 1). SCL is a licensed securities dealer in Jamaica and is regulated by the Financial Services Commission[2].
Chart 1
SCI’s Corporate Structure as at June 2021
Source: Sygnus Group
[1] On 13th May 2021, a new investment management agreement was put in place that effected a change in Investment Manager from Sygnus Capital Management Limited to Sygnus Capital Limited (SCL). SCL is a wholly owned subsidiary of Sygnus Capital Group Limited.
[2] As a registered broker, Sygnus Capital is committed to assisting local and regional clients to access financing through the debt or equity capital markets, as well as non-traditional channels through their Private Credit Investment companies which include SCI.
Analytical Contacts:
Musa Abdullah
Tel: 1-868-627-8879 Ext. 233
E-mail: [email protected]
Anelia Oudit
Tel: 1-868-627-8879 Ext. 226
Mobile: 1-868-487-8364
E-mail: [email protected]
Website: www.caricris.com
Email: [email protected]
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