Rating agency Caricris has reaffirmed the corporate credit ratings of CariA+ (foreign and local currency ratings) on the regional rating scale, and ttA+ on the T&T scale to the T&T Mortgage Finance Company Ltd (TTMF).
According to Caricris these ratings indicate the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean and within T&T is good.
In a press release Caricris indicated that the ratings include a one-notch upgrade because of the high likelihood TTMF will get financial support from the Government if needed. Caricris has also maintained a stable outlook for TTMF.
“The stable outlook is based on our expectation of improvements in economic activity over the next 12 to 15 months despite the challenges presented by the COVID-19 pandemic and Russia/Ukraine conflict....Nonetheless, TTMF is expected to continue to display a healthy financial performance with gradual improvements in asset quality,” Caricris said.
It added the company is expected to remain “well capitalised” and continue to comfortably cover its debt obligations.
The rating agency also noted that the TTMF continues to reflect its moderate market position in the real estate mortgage market, underpinned by its crucial role in the implementation of the Government’s national housing policy. Caricris said further supporting the ratings are the company’s “comfortable capitalisation level and continued financial performance reflected in high capital adequacy and good capital coverage of total assets, as well as improved profitability metrics.”
These rating strengths, it added, are tempered by TTMF’s asset quality which were adversely impacted by the lingering effects of the COVID-19 pandemic and exposure to liquidity risks as a result of its asset/liability mismatch given its high reliance on debt financing.
Additionally, Caricris said the lack of geographic diversity in the company’s revenue and funding base exposes the TTMF to significant sovereign risk which also constrains the ratings.