S&P upgrades Sagicor after move from Barbados base

New York-based credit rating agency Standard & Poor’s (S&P) has upgraded Sagicor Finance (2015) Ltd two notches.
The upgrade late Friday evening moves the previously Barbados-based financial institution, owned more than 50 per cent by Trinidad and Tobago investors, according to Sagicor Group chief operating officer Richard Kellman, up to “non-investment grade” from “highly speculative” grade.
S&P Global Ratings raised its issue-level rating on Sagicor Finance (2015) Ltd’s (SFL15’s) US$320 million seven-year senior unsecured notes to “BB-” from “B”, saying in a statement: “We also removed the rating from Credit Watch positive, where we placed it in September 2016.”
Mexico City-based S&P analysts Jesus Palacios and Camilo Andres Perez wrote: “The rating actions are based on our opinion that the sovereign rating on Barbados no longer constrains the group credit profile (GCP) of Sagicor Financial Corporation (SFC) given two significant changes in the corporate structure. First, the group’s ultimate parent, SFC, moved its domicile to Bermuda from Barbados. Second, the group is undergoing a corporate reorganisation including the separation of its Caribbean and Central American operating subsidiaries outside of Barbados from its operating holding company, Sagicor Life Inc Barbados (SLIB), and shifting them under SFC’s structure directly and individually.”
In a separate statement on SLIB, Perez and Palacios said: “We’re keeping our ‘BB-‘ ratings on Barbados-based insurer SLIB on Credit Watch with negative implications because the corporate reorganisation of the ultimate parent is still ongoing while we continue to assess its impact on SLIB.”
Returning to the upgrade rating, Palacios and Perez said: “Therefore, we conclude that both events have reduced the potential burden on the group’s assets and cash flows outside of Barbados because the group’s main regulator will no longer be the Barbadian insurance authority. Consequently, we no longer consider Barbados as the group’s country of domicile. Moreover, the ratings on SFC’s subsidiaries and financing vehicles may now reflect the full strength of the unconstrained GCP at ‘bb+’, which reflects the credit fundamentals of its operating insurance subsidiaries. Prior to the above-mentioned changes, the GCP and the ratings on operating entities – at ‘bb-‘ and ‘BB-‘, respectively-were limited at two notches above the sovereign rating on Barbados.”
They added: “The rating on SFL15’s debt reflects structural subordination from our credit assessment of SFC to account for the debt’s structural subordination to policyholder liabilities and for the seniority of the debt. Therefore, we raised the debt rating by two notches to reflect the two-notch uplift of SFC’s GCP to ‘bb+’ from ‘bb-‘. We don’t give additional credit to the guarantee provided by SFC and SLIB because the subordination of the group’s financial obligations to those of policyholders is defined in the offering memorandum.”
The Cayman Islands-based SFL15 is SFC’s special purpose vehicle to provide funding to the group and is the issuing entity of SFC’s US$320 million seven-year senior unsecured notes.
Palacios and Perez said: “Our analysis of rating fundamentals considers SFC’s consolidated results, which include the entirety of its insurance operating subsidiaries in the Caribbean region, the US, and Central America.” (Trinidad Express)

9 Responses to S&P upgrades Sagicor after move from Barbados base

  1. Honor Wiltshire
    Honor Wiltshire December 27, 2016 at 6:40 pm

    Will this be reflected in the next dividend cheque?

    Reply
  2. steel donkey December 27, 2016 at 9:48 pm

    In a nutshell, these types of reports usually mean that a rat somewhere dead or dying. Soon to stink.

    Reply
  3. Tony Webster December 28, 2016 at 5:53 am

    Hmmm….if only we also could transplant Barbados Sovereign debt portfolio…to Bermuda….sigh. Hmmm…waidaminit…we COULD re-locate Hook, Line, and Sinkus…

    Reply
  4. jrsmith December 28, 2016 at 11:03 am

    What to expect from any financial institution , with a company moving to a legal (Tax Haven) … they should have had a lot higher rating for tax avoidance…………………………….
    I wonder what were they up to , before leaving barbados , how much tax did they avoid paying in Barbados ……………..
    It will back fire on them , (Tax Havens) the time is running out ,,we in Barbados should stop allowing our country to act as guinea pigs for lots of ( shite corporations) , who cannot run honest companies to make profits, unless they get involve with tax avoidance schemes and double dealings….

    Reply
  5. jrsmith December 28, 2016 at 11:17 am

    What to expect from any financial institution , when a company moves into a legal tax haven, they should have a much higher rating all it is is tax avoidance nothing new….
    I wonder what were they up to , before leaving Barbados and how much tax was not being paid to our government..

    (Tax Havens) the time is catching up on them all,, but we in barbados must not allow our island to be used by certain corporates as guinea pigs..we had a taste of what to come this year already….

    Reply
  6. Peddy December 28, 2016 at 12:34 pm

    Jrsmith your comments arent really worth a response. In future read articles properly and also seek to do some research.

    Reply
  7. Peter December 28, 2016 at 2:08 pm

    Honor Wiltshire Your response is bang on target. I watched my dividend value dropped from over BDS $300,000.00 in 2008 to just under $ 56,000.00 so I, like you, hope to see a somewhat larger dividend cheque come later this year.

    Reply
  8. jrsmith December 28, 2016 at 2:48 pm

    @ , Peddy , hail ,hail, I made my comments thats your problem…. dont care what some one like you think..

    Reply
  9. Jennifer December 28, 2016 at 6:44 pm

    With some contacts, I think i will take my dividends and buy an underground bunker. After all my money will be no use.

    Reply

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