CariCRIS reaffirms ‘good creditworthiness’ ratings of Bourse Securities Limited

CariA????????????? (Regional Scale Foreign Currency)

CariA????????????? (Regional Scale Local Currency)

ttA????????????????? (Trinidad and Tobago National Scale Local Currency)

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Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Issuer/Corporate Credit Ratings assigned to Bourse Securities Limited (BSL or the Company) at CariA (Foreign and Local Currency Ratings) on the regional rating scale, and ttA on the Trinidad and Tobago (T&T) national scale. These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in T&T and the wider Caribbean is good.

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on the expectation of the Company’s continued profitability and strong capitalisation over the next 12-15 months, even under CariCRIS’ stress scenarios.

The ratings of BSL reflect the Company’s good financial performance, underpinned by good income diversity and efficiency levels, notwithstanding some deterioration in 2023. Also supporting BSL’s ratings is the Company’s comfortable risk-adjusted capitalisation level, reflected in strong capital adequacy ratios, good coverage of total assets and low gearing. The Company’s asset quality remains good and continues to be underpinned by a diverse investment portfolio, supported by sound risk management and asset-liability management (ALM) practices. These have contributed positively to BSL’s overall good liquidity profile. These rating strengths are tempered by the Company’s high reliance on institutional funding to support its business activities. Notwithstanding this concentration, which is characteristic of BSL’s business model, the risk remains well managed.

Rating Sensitivity Factors:

Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:

• Improving business conditions and company performance resulting in an increase in Profit after Tax (PAT) by 15% sustained for 3 financial years
• An increase in net interest spread to at least 2% sustained for 3 financial years
• An increase in Tangible Net Worth (TNW) by 15% sustained for 3 financial years
• Further reduction in its funding concentration risk such that less than 40% of BSL’s funding is derived from its top 10 clients sustained for 2 financial years

Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:

• A deterioration in the credit rating of the sovereign over the next 12-15 months leading to increased liquidity pressures
• A decline in PAT by 15% sustained for 2 financial years
• Funding withdrawals from its top 3 institutional investors

For more information on BSL’s ratings, please visit www.caricris.com or contact:

?Dr. Kathryn Budhooram

Head, Rating Operations

Mobile: 1-868-706-6510

E-mail: [email protected]

OR

Mr. Keith Hamlet

Manager, Ratings

Mobile: 1-868-487-8356

E-mail: [email protected]

Note:

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