{"id":2846,"date":"2021-10-05T20:31:49","date_gmt":"2021-10-06T00:31:49","guid":{"rendered":"https:\/\/craftedcaribbean.com\/caricris\/?p=2846"},"modified":"2025-07-01T20:32:50","modified_gmt":"2025-07-02T00:32:50","slug":"trinidad-and-tobago-mortgage-finance-company-limited-3","status":"publish","type":"post","link":"https:\/\/craftedcaribbean.com\/caricris\/rating-releases\/trinidad-and-tobago-mortgage-finance-company-limited-3\/","title":{"rendered":"Trinidad and Tobago Mortgage Finance Company Limited"},"content":{"rendered":"<h3>RATING DRIVERS<\/h3>\n<p class=\"badge\">Supporting Factors<\/p>\n<ul style=\"list-style-type: square;\">\n<li data-mce-word-list=\"1\">Moderate market position in T&amp;T\u2019s real estate mortgage market, supported by TTMF\u2019s crucial role in the implementation of GORTT\u2019s national housing policy<\/li>\n<li data-mce-word-list=\"1\">Comfortable capitalization, reflected in high capital adequacy and good capital coverage of total assets<\/li>\n<li data-mce-word-list=\"1\">Continued good financial performance in 2020 despite a fall in profitability<\/li>\n<\/ul>\n<p class=\"badge\">Constraining Factors<\/p>\n<ul style=\"list-style-type: square;\">\n<li data-mce-word-list=\"1\">Asset quality adversely impacted by the COVID-19 pandemic<\/li>\n<li data-mce-word-list=\"1\">Asset\/liability mismatch increases exposure to potential liquidity risks given high reliance on debt financing<\/li>\n<li data-mce-word-list=\"1\">Lack of geographic diversity in TTMF\u2019s revenue and funding exposes the company to significant sovereign risk<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline; font-size: 10pt;\"><strong>Rating Sensitivity Factors<\/strong><\/span><\/p>\n<p><strong><span style=\"text-decoration: underline;\"><span style=\"font-size: 10pt;\">Factors that could, individually, or collectively lead to an improvement in the ratings and\/or outlook include:<\/span><\/span><\/strong><\/p>\n<ul style=\"list-style-type: square;\">\n<li data-mce-word-list=\"1\">An improvement in the credit rating of the sovereign over the next 12-15 months<\/li>\n<li data-mce-word-list=\"1\">The advancement of the proposed merger over the next 12 months which will lower funding costs and introduce new products<\/li>\n<li data-mce-word-list=\"1\">Successful completion of housing projects over the next 12 months which should grow TTMF\u2019s subsidized mortgage portfolio<\/li>\n<\/ul>\n<p><span style=\"font-size: 10pt;\"><strong><span style=\"text-decoration: underline;\">Factors that could, individually, or collectively lead to a lowering of the ratings and\/or outlook include:<\/span><\/strong><\/span><\/p>\n<ul style=\"list-style-type: square;\">\n<li data-mce-word-list=\"1\">A deterioration in the credit rating of the sovereign over the next 12-15 months<\/li>\n<li data-mce-word-list=\"1\">A rise in the cost to income ratio to 55% or greater<\/li>\n<li data-mce-word-list=\"1\">A sustained increase in interest rates by 100 basis points or greater over the next 12 months, resulting in increased debt funding costs<\/li>\n<li data-mce-word-list=\"1\">A material reduction (50% or greater) in or complete withdrawal of subsidized funding from the GORTT<\/li>\n<li data-mce-word-list=\"1\">NPLs\/Gross loans greater than 8% for 2 consecutive years<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline; font-size: 10pt;\"><strong>COMPANY BACKGROUND<\/strong><\/span><\/p>\n<p><span style=\"font-size: 10pt; font-family: 'book antiqua', palatino;\">Trinidad and Tobago Mortgage Finance Company Limited (TTMF) was incorporated under the Companies Act of Trinidad and Tobago on December 3, 1965. Its shareholders are the Government of the Republic of Trinidad and Tobago (GORTT) and the National Insurance Board of Trinidad and Tobago (NIBTT), with shareholdings of 49% and 51% respectively. TTMF is not a licensed deposit-taking institution and relies primarily on bonds to fund its lending operations.<\/span><\/p>\n<p><span style=\"font-size: 10pt; font-family: 'book antiqua', palatino;\">TTMF was formed to fulfil the GORTT\u2019s mandate of providing affordable residential mortgage financing to low to middle-income households in Trinidad and Tobago (T&amp;T). It is the lead vehicle for mortgage financing under the GORTT\u2019s Affordable Housing Finance Programme (2% and 5% Mortgage Programme). It is also a key part of the State\u2019s housing business model in which the Trinidad and Tobago Housing Development Corporation (HDC) constructs the houses, and TTMF provides the mortgage financing. Although the HDC refers potential homeowners to the TTMF, they can obtain financing from other institutions. TTMF widened its target market several years ago to include all persons interested in residential mortgage financing. As such, the company\u2019s product range now includes subsidized and open market residential mortgage loans as well as home equity loans with tenors of up to 30 years at stable interest rates, currently ranging between 2% and 6% per annum<a id=\"_ftnref1\" href=\"#_ftn1\"><sup>[1]<\/sup><\/a>.<\/span><\/p>\n<p><span style=\"font-size: 10pt; font-family: 'book antiqua', palatino;\">In 2014, the GORTT approved a merger to create an institution conceptualized to leverage on synergies between TTMF and Home Mortgage Bank (HMB).\u00a0 In 2016, a Memorandum of Understanding (MOU) was signed between the TTMF and HMB, which allows both companies to derive benefits from a close corporate alliance while maintaining the integrity and independence of both companies.\u00a0 Under the terms of the MOU, HMB is required to develop appropriate products and markets for the sale of securitised mortgage products to provide consistent sources of low-cost long-term financing to TTMF, by way of an agreed programme of mortgage purchases.\u00a0 Following the completion of a cost benefit assessment earlier in 2021 by PricewaterhouseCoopers Advisory Services Limited (\u201cPwC\u201d) on the type of merger to be pursued, approval to commence the merger of both entities was granted by the Minister of Finance.\u00a0 The approved method for the merger is a Distribution in Specie, whereby all assets and liabilities of the liquidated HMB will be transferred to TTMF.\u00a0<\/span><\/p>\n<p><span style=\"color: #000000;\"><a id=\"_ftn1\" style=\"color: #000000;\" href=\"#_ftnref1\">[1]<\/a><\/span><em>eives a Government subsidy for its 2% and 5% mortgage rates, through which qualifying citizens can benefit from subsidized interest rates.<\/em><\/p>\n<p><span style=\"font-size: 10pt;\"><em>Analytical Contacts:<\/em><\/span><\/p>\n<p><strong><span style=\"font-size: 8pt;\">Jeffrey James<\/span><\/strong><\/p>\n<p><span style=\"font-size: 8pt;\"><em>Tel: 1-868-627-8879 Ext. 236<\/em><\/span><\/p>\n<p><span style=\"font-size: 8pt;\"><em>E-mail: <a href=\"mailto:jjames@caricris.com\">jjames@caricris.com<\/a><\/em><\/span><\/p>\n<p><strong><span style=\"font-size: 8pt;\">Anelia Oudit<\/span><\/strong><\/p>\n<p><span style=\"font-family: 'book antiqua', palatino; font-size: 8pt;\"><em>Tel: 1-868-627-8879 Ext. 226<\/em><\/span><\/p>\n<p><span style=\"font-family: 'book antiqua', palatino; font-size: 8pt;\"><em>Mobile: 1-868-487-8364<\/em><\/span><\/p>\n<p><span style=\"font-size: 8pt;\"><em>E-mail: <a href=\"mailto:aoudit@caricris.com\">aoudit@caricris.com<\/a><\/em><\/span><\/p>\n<p><span style=\"font-size: 8pt;\">Website: <a href=\"http:\/\/www.caricris.com\">www.caricris.com<\/a><\/span><\/p>\n<p><span style=\"font-size: 8pt;\">Email: <a href=\"mailto:info@caricris.com\">info@caricris.com<\/a><\/span><\/p>\n<p><span style=\"font-size: 8pt; font-family: 'book antiqua', palatino;\">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.\u00a0 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.\u00a0 No part of this report may be published \/ reproduced in any form without CariCRIS\u2019 prior written approval.\u00a0 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.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>RATING DRIVERS Supporting Factors Moderate market position in T&amp;T\u2019s real estate mortgage market, supported by TTMF\u2019s crucial role in the implementation of GORTT\u2019s national housing policy Comfortable capitalization, reflected in high capital adequacy and good capital coverage of total assets Continued good financial performance in 2020 despite a fall in profitability Constraining Factors Asset quality [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46],"tags":[],"table_tags":[],"class_list":["post-2846","post","type-post","status-publish","format-standard","hentry","category-rating-releases"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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