CARIBBEAN INFORMATION and Credit Rating Services (CariCRIS) yesterday assigned its first ever public rating of CariAAA (Foreign Currency), its highest rating in the regional rating scale, to the National Gas Company of Trinidad and Tobago Limited's (NGC) US$330 million proposed debt issue.
The occasion marks a new beginning for the Caribbean bond markets, ushering in the
concept of credit rating, a global best practice which helps in rapid development of local bond markets.
According to chairman of CariCRIS, Terrence Martins, "This is a proud moment for all of us in the Caribbean as it marks a new era for the local bond markets. Introduction of such local ratings significantly improves the quality of information and analysis available to investors. This has resulted in rapid development of local bond markets in several emerging markets such as India, Korea and Malaysia and we are confident of a similar out-turn in the Caribbean as well."
NGC, 100 per cent owned by the Government of Trinidad & Tobago, is the premier company in the country's thriving gas sector, and primarily engaged in transmission and distribution of natural gas, merchant gas trading and investment holdings in key down-stream gas related businesses.
SHARED RESPONSIBILITY
According to its vice-president, Daniel Sankar, "At NGC, we seriously believe that we have a shared responsibility in contributing to a more transparent financial market, and this helped our decision to access a regional scale rating from CariCRIS for our proposed U.S. dollar debt issue. Moreover, we decided to access a local rating, apart from a global scale rating for our debt, because we believe it brings out a more relevant comparison for our bankers and investors, and provides a more granular credit assessment. Otherwise, especially in countries such as Barbados, Jamaica and Trinidad & Tobago, with sovereign ratings by global rating agencies in the BBB or lower categories, there is a lot of lumping at the lower end of the rating scale and very little ability to differentiate ourselves from others."
Added CEO and chief rating officer, CariCRIS, S. Venkat Raman, "With NGC taking this healthy initiative of obtaining a local credit rating, we expect the more proactive issuers in the region to follow suit, as this could help lowering their cost of funds and diversify their funding sources. For more cautious and discerning investors, who wish to closely examine their risks and pricing through an independent assessment, CariCRIS ratings and rating analysis will now give an opportunity, as increased use of ratings will reduce anomalies across the region in pricing debt issuances and help establish a proper yield curve."
