Jun 2016 Financial News

Sagicor seeks home move to Bermuda

Jun 07, 2016

THE Sagicor Financial Corporation will ask its shareholders at their annual general meeting (AGM) in Barbados tomorrow to approve the company’s move of its headquarters from Barbados to Bermuda. The company has been searching for a new home base since its current base, Barbados, was downgraded by the rating agency Standard and Poor’s. It considered relocating to the United Kingdom, here to TT or to Bermuda, eventually choosing Bermuda as its new home.

In a letter to shareholders in advance of the AGM, the company’s management said if the move is approved the company “could reasonably expect to receive a Standard and Poor’s rating lift to BB+ unhindered by the restrictions of the current Barbados rating. Improvement in the company’s rating would result in reduced cost of capital, increased attractiveness to regional and international investors and all the attendant ancillary benefits flowing therefrom.” Questioned about these benefits following a news conference yesterday, Ravi Rambarran, chief executive officer of Sagicor International, said “we will have the ability to have improved access to capital, secondly improved cost of capital and those two will allow us to fund in a more effective manner our opportunities for growth.” Regarding the downgrade, he said “Standard and Poor’s rating methodology says that under normal circumstances a company cannot be rated above its country of domicile. In exceptional circumstances it will allow a company to be rated two notches above its country of domicile.” He said Sagicor had been in that exceptional basket for quite some time “and they have indicated that Sagicor is likely to receive an upgrade if it successfully executes its plans for redomiciliation in an investment grade country.” Bermuda has a Standard and Poor’s Rating of A+ with a positive outlook while Barbados has a sovereign rating of B with a negative outlook. The Sagicor annual general meeting will be held tomorrow afternoon at the Lloyd Erskine Sandiford Centre at Two Mile Hill, St Michael, Barbados. The company is currently domiciled in Barbados and its credit rating is limited by the rating of Barbados which is not investment grade.

According to notes to shareholders contained in the notice of the AGM, “This is after a series of downgrades (of Barbados) in the period from 2009 to 2014. In order to improve the company’s ratings (both corporate and securities), the company is seeking approval to redomicile into Bermuda, which is an investment grade-rated country. This would be achieved via a corporate migration, or continuance, of the company to Bermuda and the discontinuance of the company in Barbados.”

Source:
By VERNE BURNETT 
Newsday
Tuesday June 7, 2016

http://www.newsday.co.tt/business/0,228854.html