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Tuesday, July 15, 2025

HMB investment gets high rating

by

Geisha Kowlessar-Alonzo
460 days ago
20240412
National Insurance Board (NIB) chairman, Patrick Ferreira addresses the launch of Trinidad and Tobago Mortage Bank (TTMB) at the Hyatt Regency on March 20. Trinidad and Tobago Mortgage Finance and the Home Mortgage Bank merged earlier this year to form TTMB.

National Insurance Board (NIB) chairman, Patrick Ferreira addresses the launch of Trinidad and Tobago Mortage Bank (TTMB) at the Hyatt Regency on March 20. Trinidad and Tobago Mortgage Finance and the Home Mortgage Bank merged earlier this year to form TTMB.

ANISTO ALVES

Rat­ing agency the Caribbean In­for­ma­tion and Cred­it Rat­ing Ser­vices Ltd (Cari­CRIS) has reaf­firmed its over­all “high cred­it­wor­thi­ness” rat­ings to the $100 mil­lion col­lat­er­alised mort­gage oblig­a­tion (CMO) of Home Mort­gage Bank (HMB), the fi­nan­cial in­sti­tu­tion that was merged with Trinidad and To­ba­go Mort­gage Fi­nance ear­li­er this year to form Trinidad and To­ba­go Mort­gage Bank (TTMB).

Cari­CRIS, in a state­ment yes­ter­day, said it reaf­firmed its over­all is­sue rat­ings of ttAA- (SO) on the T&T na­tion­al scale to the TT $100 mil­lion Col­lat­er­alised Mort­gage Oblig­a­tion (CMO) of Home Mort­gage Bank (HMB) (CMO 2022-01).

This rat­ing in­di­cat­ed that the over­all lev­el of cred­it­wor­thi­ness of this struc­tured debt oblig­a­tion, ad­judged in re­la­tion to oth­er rat­ed debt oblig­a­tions with­in T&T, is high.

CMO 2022-01 is a struc­tured fi­nance debt in­stru­ment be­ing cre­at­ed by the HMB.

The prod­uct was cre­at­ed to se­cu­ri­tise res­i­den­tial mort­gage as­sets pur­chased from the T&T Mort­gage Fi­nance Com­pa­ny Ltd (TTMF) on the sec­ondary mort­gage mar­ket.

Cari­CRIS al­so as­signed a sta­ble out­look on the rat­ings.

The sta­ble out­look is based on an ex­pec­ta­tion of con­tin­ued im­prove­ment in eco­nom­ic con­di­tions in T&T, which should have a pos­i­tive im­pact on busi­ness­es and house­holds. Ad­di­tion­al­ly, this may al­so lead to an im­prove­ment in as­set qual­i­ty and sta­bil­i­ty of the over­all cred­it risk of CMO 2022-01, Cari­CRIS stat­ed.

It said the rat­ings of CMO 2022-01 con­tin­ue to re­flect the good cred­it qual­i­ty of the se­cu­ri­tised loans in the mort­gage pool, notwith­stand­ing a mar­gin­al de­te­ri­o­ra­tion be­tween 2022 and 2023.

No­tably, Cari­CRIS said the sim­ple trans­ac­tion struc­ture with built-in cred­it en­hance­ments con­tin­ues to pro­vide ad­e­quate pro­tec­tion to in­vestors.

Ad­di­tion­al­ly, the un­der­writ­ing prac­tices of TTMF, the orig­i­na­tor of the mort­gages with­in the pool, con­tin­ue to re­main good.

Fur­ther­more, the rat­ing agency said the le­gal and reg­u­la­to­ry frame­work which sup­port this trans­ac­tion al­so pro­vides ad­e­quate pro­tec­tion to in­vestors.

The rat­ings are how­ev­er, tem­pered by the pos­si­bil­i­ty that the sea­son­ing of the un­der­ly­ing mort­gage pool could in­crease de­fault risk over the life of the struc­tured debt oblig­a­tion.

On the is­sue of the CMO’s rat­ing sen­si­tiv­i­ty, the rat­ing agency out­lined there are fac­tors in­di­vid­u­al­ly, or col­lec­tive­ly which could lead to an im­prove­ment in the rat­ings and/or out­look in­clud­ing:

An im­prove­ment in the cred­it rat­ing of the sov­er­eign over the next 12 to 15 months;

Sat­is­fac­to­ry re­pay­ment of Tranche A with pay­ment flows in line with or above Cari­CRIS’ ex­pec­ta­tions; and

Sus­tained im­prove­ment in TTMF’s as­set qual­i­ty lev­els which re­duces the orig­i­na­tor risk.

Speak­ing at the launch of TTMB on March 20, Fi­nance Min­is­ter Colm Im­bert said: “We have two ro­bust com­pa­nies unit­ing to be­come a for­mi­da­ble or­gan­i­sa­tion that would pro­vide healthy com­pe­ti­tion in mort­gage and in­vest­ment port­fo­lios in a mar­ket where for­tune favours the brave and those who al­ready have some means.

“As we have sought to do through­out our tenure, we are seek­ing to change the land­scape by bring­ing some eq­ui­ty in­to the re­al es­tate play­ing field.”

Im­bert told the launch that in Feb­ru­ary 2006, the TTMF was ap­proved as the sole ad­min­is­tra­tor of the fi­nanc­ing regime un­der the Go­ern­ment’s Af­ford­able Hous­ing Pro­gramme, which en­sured that the hous­ing needs of low­er-and-mid­dle-in­come earn­ers were met..

“Be­tween Jan­u­ary 2007 and De­cem­ber 2023, some 20,797 new loans were is­sued at a val­ue of $9.4 bil­lion...This in­cludes 8,515 loans val­ued at $4.2 bil­lion, which were is­sued un­der the af­ford­able hous­ing fi­nanc­ing fa­cil­i­ty im­ple­ment­ed by this ad­min­is­tra­tion.”


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