The Trinidad and Tobago Chamber of Industry and Commerce (T&T Chamber) has called for continued adherence to sound governance and fiscal management practices at the National Gas Company of Trinidad and Tobago (NGC), following recent public discussion on the company’s credit rating arrangements.
In a release yesterday, the chamber acknowledged NGC’s decision to discontinue its subscription relationship with Moody’s while maintaining engagement with other internationally recognised credit rating agencies. It noted that credit ratings are independent opinions and said differences between issuers and rating agencies on methodology are not unusual.
The chamber added that NGC is entitled to make commercial decisions regarding its rating relationships, and pointed out that the company continues to be rated by S&P, CariCRIS and Fitch.
At the same time, the T&T Chamber stressed the importance of transparency, consistency and investor confidence, particularly in relation to state enterprises and national economic interests.
It said credit ratings play a key role in shaping perceptions among investors, lenders and international stakeholders, and that any changes to rating relationships will naturally attract scrutiny and public interest.
“The key issue is not solely which agency is retained, but whether there remains sufficient independent international oversight, credible disclosure of financial performance, and continued adherence to sound governance and fiscal management practices,” the chamber said.
In that spirit, the chamber encouraged NGC to support market confidence through the continued timely publication of audited financial statements and robust disclosure to its remaining rating agencies and bondholders.
It also urged the Government, as the ultimate shareholder, to continue addressing macroeconomic concerns raised by both Moody’s and S&P, including foreign-exchange reserves, fiscal trajectory and energy-sector performance, which it said bear on all businesses operating in Trinidad and Tobago.
The T&T Chamber reiterated that good governance, transparency and continued dialogue between Government, state enterprises and the business community remain important to sustaining investor confidence in the country.
Hours after international rating agency Moody’s Investors Service withdrew NGC’s credit assessment ratings, the company said the move was not due to financial trouble but followed a realignment of its external credit rating agency engagements, after it discontinued its relationship with Moody’s on February 26.
NGC said, “This decision followed a comprehensive review of the company’s credit rating framework, including the requirements under its existing debt covenants. While these covenants require the maintenance of a minimum of one international credit rating, NGC has historically maintained multiple ratings, having been assessed since 2005 by Moody’s Investors Service, S&P Global Ratings and CariCRIS, and more recently adopting a two international agency approach.”
NGC added, “This review evaluated the continued alignment of that framework with NGC’s evolving financial profile, operating performance and long-term strategic objectives. The company does not consider the previously assigned sub-investment grade rating by Moody’s to be an accurate reflection of its standalone credit profile.”
In December, Moody’s had downgraded NGC’s ratings.
In justifying its move, NGC said, “The decision of the company to realign was with a view to achieve such a rating. Other international rating agencies have assessed NGC at a higher-level grade than Moody’s. However, Moody’s application of a more rigid methodological framework, particularly with respect to sovereign linkage, did not admit of sufficient flexibility to recognise NGC’s unique circumstances and standalone credit strength.”
In an earlier statement, Moody’s said it had withdrawn the Ba2 corporate family rating (CFR), ba2 baseline credit assessment (BCA) and Ba2 senior unsecured notes of NGC.
