Last Thurs­day, May 14, the rat­ing agency Moody’s is­sued a news re­lease, known as a rat­ing ac­tion, an­nounc­ing that it had with­drawn its cred­it rat­ing for the whol­ly state-owned Na­tion­al Gas Com­pa­ny of Trinidad and To­ba­go (NGC) due to in­suf­fi­cient in­for­ma­tion. Moody’s with­drew NGC’s Ba2 cor­po­rate fam­i­ly rat­ing, ba2 base­line cred­it as­sess­ment and Ba2 se­nior un­se­cured notes.

The rat­ing agency not­ed that pri­or to the with­draw­al, its out­look on NGC was neg­a­tive.

Moody’s said, “We have de­cid­ed to with­draw the rat­ing(s) be­cause of in­ad­e­quate in­for­ma­tion to mon­i­tor the rat­ing(s), due to the is­suer’s de­ci­sion to cease par­tic­i­pa­tion in the rat­ing process.”

In re­sponse to Moody’s news re­lease, which was is­sued last Thurs­day, the NGC’s re­sponse was sent to me­dia hous­es at 3:23 pm on Fri­day.

The NGC news re­lease in­di­cat­ed that the com­pa­ny has “re­aligned its ex­ter­nal cred­it rat­ing agency en­gage­ments” and that “a crit­i­cal part of this re­align­ment was the dis­con­tin­u­a­tion of its re­la­tion­ship with Moody’s In­vestors Ser­vice, ef­fec­tive Feb­ru­ary 26, 2026.”

In ex­plain­ing why NGC de­cid­ed to dis­con­tin­ue its re­la­tion­ship with Moody’s, the T&T com­pa­ny stat­ed, “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.

“NGC’s fi­nan­cial po­si­tion, op­er­at­ing mod­el, and risk char­ac­ter­is­tics are, in man­age­ment’s view, more con­sis­tent with an in­vest­ment grade stand­ing, sup­port­ed by its earn­ings pro­file, liq­uid­i­ty and debt ser­vice ca­pac­i­ty. The de­ci­sion of the com­pa­ny to re­align was with a view to achieve such a rat­ing.”

On De­cem­ber 12, 2025, Moody’s main­tained the Gov­ern­ment of Trinidad and To­ba­go’s long-term lo­cal and for­eign cur­ren­cy is­suer and se­nior un­se­cured rat­ings at Ba2, while chang­ing its out­look on the coun­try from sta­ble to neg­a­tive.

On De­cem­ber 15, Moody’s main­tained the NGC’s Ba2 cor­po­rate fam­i­ly rat­ing and, fol­low­ing its re­vi­sion of the out­look of the T&T Gov­ern­ment, al­so re­vised NGC’s out­look from sta­ble to neg­a­tive. Moody’s ap­plied sim­i­lar treat­ment to Her­itage Pe­tro­le­um Com­pa­ny and to Port-of-Spain Wa­ter­front De­vel­op­ment Ltd, mean­ing that the rat­ing agency kept its rat­ings of the three com­pa­nies but changed its out­look to neg­a­tive from sta­ble.

As Moody’s ex­plained, “Ac­cord­ing­ly, the change in the com­pa­nies’ out­look to neg­a­tive re­flects the height­ened gov­ern­ment liq­uid­i­ty risks, which di­rect­ly con­strain the po­ten­tial sup­port avail­able to Her­itage, NGC, and Port-of-Spain Wa­ter­front De­vel­op­ment Ltd.”

Ques­tions arise with re­gard to Moody’s ap­proach to close­ly link­ing the rat­ing of state-owned com­pa­nies to the sov­er­eign (that is T&T) rat­ing:

a) On what ba­sis did the “man­age­ment” of NGC be­lieve it should be rat­ed by Moody’s at in­vest­ment grade, when its 100 per cent own­er is rat­ed as junk by the rat­ing agency?

b) Does the NGC chair­man re­al­ly be­lieve that he has done such a re­mark­able job in the ten months he has been in the chair that the com­pa­ny should be rat­ed high­er than its own­er?

I would ar­gue that NGC board has per­formed as ex­pect­ed in com­plet­ing the ne­go­ti­a­tions with the up­stream sup­pli­ers of nat­ur­al gas and the down­stream petro­chem­i­cal users of the com­mod­i­ty. That com­ment must be tak­en in the con­text of the de­ci­sion by Nu­trien to shut down its five-plant com­plex and look for a buy­er.

The strong-arm tac­tics used by NGC to ex­tract a high­er gas price from the light in­dus­tri­al and com­mer­cial (LIC) users of the com­mod­i­ty were most re­gret­table and are like­ly to dam­age the cur­rent ad­min­is­tra­tion’s goal of in­creas­ing non-en­er­gy ex­ports by US$5 bil­lion in five years.

Third­ly, this col­umn be­lieves that the NGC board should re­ceive an A+ for ac­cept­ing the le­gal and fi­nan­cial ad­vice that was avail­able to the pre­vi­ous ad­min­is­tra­tion and bring­ing re­lief to the share­hold­ers of TTNGL by fa­cil­i­tat­ing that com­pa­ny’s pay­ment of a div­i­dend af­ter three years.

c) Why would a rat­ing agency up­grade a com­pa­ny that is yet to pro­duce au­dit­ed ac­counts for its fi­nan­cial year end­ed De­cem­ber 31, 2025, when we are ap­proach­ing the end of the fifth month of 2026?

Down­grade trig­gers

In an­oth­er Moody’s doc­u­ment, the rat­ing agency out­lined three spe­cif­ic trig­gers that could sig­nal fu­ture down­grades of NGC:

—Mar­gin ero­sion: A ma­te­r­i­al weak­en­ing in NGC’s mar­gins or cash flow;

—Ag­gres­sive ex­trac­tion: Gov­ern­ment in­ter­fer­ence tak­ing the form of sig­nif­i­cant­ly high­er tax­a­tion or ex­ces­sive div­i­dend ex­trac­tions that com­pro­mised NGC’s liq­uid cap­i­tal; and

—Man­date de­vi­a­tion: The Gov­ern­ment forc­ing NGC away from its prof­itable com­mer­cial core op­er­a­tions to fund un­prof­itable pub­lic pol­i­cy or so­cial pro­grammes.

In my view, it seems ob­vi­ous that the Min­istry of Fi­nance, which is head­ed by Dav­en­dranath Tan­coo, has adopt­ed an ag­gres­sive ex­trac­tion ap­proach to NGC and its sub­sidiaries, es­pe­cial­ly with re­gard to div­i­dends.

In the House of Rep­re­sen­ta­tives on May 8, for­mer min­is­ter of en­er­gy in the pre­vi­ous Peo­ple’s Na­tion­al Move­ment ad­min­is­tra­tion, Stu­art Young, asked cur­rent Min­is­ter of En­er­gy, Dr Roodal Mooni­lal, ques­tions per­tain­ing to the pay­ment of div­i­dends since May 1, 2025, by the Na­tion­al En­er­gy Cor­po­ra­tion (NEC), to its par­ent com­pa­ny NGC.

Mr Young asked Dr Mooni­lal the fol­low­ing ques­tions: whether any div­i­dends were paid; the to­tal amount of div­i­dends paid; the date of each div­i­dend pay­ment and the cur­ren­cy of the div­i­dend pay­ments.

Dr Mooni­lal’s re­spons­es were: “Yes, div­i­dends were paid by the Na­tion­al En­er­gy Cor­po­ra­tion of Trinidad and To­ba­go. The to­tal amount of div­i­dends that have been paid to date is 60 mil­lion Unit­ed States dol­lars. The dates div­i­dends were paid to NGC were as fol­lows: US$30 mil­lion paid on Sep­tem­ber 23, 2025 and US$30 mil­lion on Jan­u­ary 13, 2026.

In a fol­low-up ques­tion to Dr Mooni­lal, Mr Young asked whether the div­i­dends paid by NEC to NGC were paid by the lat­ter to the Min­is­ter of Fi­nance. House Speak­er, Jagdeo Singh ruled that that was a dif­fer­ent ques­tion that did not arise and was “not per­mis­si­ble un­der the stand­ing or­ders.”

Moody’s prob­lem with NGC

In my view, Mr Young’s ques­tions and Dr Mooni­lal’s re­spons­es go to the heart of Moody’s prob­lem with NGC.

It seems to me that Mr Tan­coo is lean­ing on state-owned com­pa­nies, es­pe­cial­ly those flush with cash, as NGC is, to boost T&T’s stat­ed net for­eign re­serves.

It needs to be made abun­dant­ly and pel­lu­cid­ly clear that this com­men­ta­tor sup­ports the right of share­hold­ers to re­ceive div­i­dends from com­pa­nies. As some­one who has been an ac­tive share­hold­er for 42 years, I whol­ly sup­port state-owned com­pa­nies pay­ing div­i­dends to their par­ent (in this case, NGC) and the par­ent mak­ing div­i­dend pay­ments to its sole share­hold­er, Cor­po­ra­tion Sole.

But sev­er­al is­sues arise:

1) What is the quan­tum of div­i­dends paid by NGC to its share­hold­ers since May 1?

2) What per­cent­age of NGC’s cash re­serves do those div­i­dend pay­ments rep­re­sent?

3) Are the pay­ments of div­i­dends de­priv­ing the state-owned group of com­pa­nies of cash that can be used to pay its bills, make in­vest­ments in new rev­enue-gen­er­at­ing ven­tures, or safe­guard the com­pa­ny in the event of lit­i­ga­tion by a dis­grun­tled for­eign multi­na­tion­al?

In oth­er words, is the Gov­ern­ment mak­ing “ex­ces­sive div­i­dend ex­trac­tions” from NGC that com­pro­mise the com­pa­ny’s liq­uid cap­i­tal?”

4) Are the pay­ments of div­i­dends by NGC and its sub­sidiaries be­ing made in ac­cor­dance with a clear­ly stat­ed pol­i­cy that has been ap­proved by both the sole share­hold­er and the com­pa­ny?

5) Are the pay­ments of div­i­dends by NGC to its sole share­hold­er based on a pre­dictable sched­ule and on a de­fined per­cent­age of its earn­ings?

Rat­ing agency on NGC

Na­tion­al Gas Com­pa­ny of Trinidad and To­ba­go (NGC), head­quar­tered in Point Lisas, Trinidad, is a di­ver­si­fied nat­ur­al gas trans­mis­sion and dis­tri­b­u­tion com­pa­ny with ex­plo­ration and pro­duc­tion op­er­a­tions....

The com­pa­ny has eq­ui­ty stakes in Phoenix Park Gas Proces­sors Ltd, which owns and op­er­ates Trinidad and To­ba­go’s sole cryo­genic gas pro­cess­ing plant, and in At­lantic LNG Com­pa­ny of T&T, which is a sup­pli­er of liq­ue­fied nat­ur­al gas (LNG) to glob­al mar­kets. NGC, through its down­stream sub­sidiary NGC Petro­chem­i­cals Lim­it­ed (NPL), al­so has a 20 per cent share­hold­ing in the Caribbean Gas Chem­i­cal Ltd’s Methanol and Di­methyl Ether Petro­chem­i­cal Com­plex.

More than 70 per cent of NGC’s gas sales vol­ume is di­rect­ed to the do­mes­tic petro­chem­i­cal in­dus­try (am­mo­nia and methanol), with the re­main­ing sold to the do­mes­tic pow­er (19 per cent), steel (7.0 per cent) and oth­er petro­chem­i­cal and light in­dus­tri­al cus­tomers (less than 5.0 per cent).

NGC owns around 1,000 kilo­me­ters of both off­shore and on­shore pipelines, with a max­i­mum ca­pac­i­ty of 4.4 bil­lion cu­bic feet per day (bcf/d).