Feb 2008 Financial News

Republic Bank’s $1 billion bond issue receives “high creditworthiness” ratings from CariCRIS

Feb 13, 2008

Caribbean Information and Credit Rating Services Limited (CariCRIS), the Caribbean regional credit rating agency, has assigned the ratings of CariAA+ (Foreign Currency Rating) and CariAA+ (Local Currency Rating) in its regional rating scale, and ttAA+ on the Trinidad and Tobago National Scale to the debt issue of the size of TTD 1 billion of Republic Bank Limited (RBL). These ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean[1] and within Trinidad and Tobago is high.

The ratings reflect RBL’s strong market position in Trinidad and Tobago, Barbados, Grenada and Guyana and its good diversity in earnings, assets and resource base. RBL’s profitability compares favourably with international benchmarks and its asset quality and provisioning are comparable with other indigenous banks in the English-speaking Caribbean region. RBL’s strengths are tempered by the scope for improvement in its risk management and information systems.

Going forward, RBL’s credit profile will be dependent upon its ability to grow across the Caribbean region without impairing performance indicators. CariCRIS expects no sharp changes in RBL’s T&T or regional market share following the completion of the RBC Financial Group’s acquisition of RBTT Financial Holdings. CariCRIS also expects improved financial performance of RBL in light of the sale of the only loss-making subsidiary in its Group.

Commenting on the occasion, CariCRIS’ CEO, Wayne Dass, said that “Republic Bank’s management must be congratulated for taking this leadership role in having their bond issue rated. In doing this, they have set an important example for other borrowers in the region, both corporate and sovereign, to follow. As more and more bond issuers access credit ratings, investors in these bonds can make more informed opinions on the risk they are undertaking and the appropriateness of the price of this risk. I am delighted at this development as it is a clear and positive step towards improving overall market transparency and the trading of bonds on the secondary market, critical imperatives for development of the capital markets of the region”.


About the bank: RBL is among the leading banking groups in the Region with a history of about 170 years and a presence in seven countries. In terms of asset base, RBL is the second largest in both Trinidad & Tobago and Barbados. The subsidiaries in Grenada and Guyana maintain strong leadership positions in these countries. The Group has also made an entry into the Spanish-speaking Caribbean with the establishment of a representative office in Cuba in May 2002 and the acquisition of Banco Mercantil in the Dominican Republic in 2003, subsequently sold in 2007. While the operations in Trinidad and Tobago are the largest, contributing around 60% to RBL’s total assets as at September 30, 2007, the assets of the operations in Barbados and other regions accounted for 22% and 18% of RBL’s total assets respectively.

Note: Mr. Ronald Harford is a Director on the Board of Republic Bank as well as CariCRIS. Mr. William Lucie-Smith is a member of the CariCRIS Rating Committee as well as a Director on the Board of Republic Bank. Mr. Colin Brewer is a member of the CariCRIS Rating Committee as well as a Director on the Board of Republic Bank Trinidad and Tobago (Barbados) Limited, a subsidiary of Republic Bank. These individuals did not participate in the rating process and the rating decision.

Source:
Caribbean Information and Credit Rating Services Limited (CariCRIS)
Wednesday 13th February, 2008

http://www.caricris.com/index.php?option=com_caricris&Itemid=44&id=32&t=p