Cornerstone Financial Holdings Limited (CFHL), a prominent player in the financial industry, is pleased to announce the achievement of an investment grade credit rating, as assessed by CariCRIS, the Caribbean’s premier credit rating agency. The rating independently acknowledges the financial strength and soundness of the Company and represents another important step towards a robust future.
CariCRIS has awarded CFHL investment grade ratings, granting the company CariBBB+ (Local Currency Rating) and CariBBB (Foreign Currency Rating) on the regional rating scale. On the Jamaica national scale, CFHL received jmA (Local Currency Rating) and jmA- (Foreign Currency Rating).
While CFHL’s financial strength has been long recognized by the commercial banks and securities dealers within the region with which it has had funding arrangements, the achievement of the credit rating provides other potential investors in CFHL’s debt securities with an independent quantification of its financial strength. Additionally, the rating will allow portfolios that require a publicly issued investment grade rating to benefit from instruments issued by CFHL.
Continued value creation and maintenance of good capitalization and liquidity ratios are noted as factors that support CFHL’s ability to comfortably repay credit facilities. The stable outlook reflects CariCRIS’s assessment of the company’s financial health and its potential for sustainable growth. Several factors have contributed to this positive rating, in particular CFHL’s role as the majority shareholder of Barita Investments Limited (BIL) and its strong commitment to enhancing its corporate governance structure. Additionally, under a potential restructure required to become a Financial Holding Company, CFHL is expected to become the ultimate holding company and majority owner of the Financial Holding Company (FHC) following BIL’s proposed delisting from the Jamaica Stock Exchange (JSE).
The release notes that a credit rating upgrade would take place upon the occurrence of the following key factors, which includes an improvement in the credit risk profile of the Government of Jamaica over the next 12-15 months, an improvement in the credit risk profile of BIL over the next 12-15 months, further diversification of revenue streams and asset classes through restructuring exercises and the addition of investment-grade assets sustained over the next 2 years. In addition, CFHL’s successful acquisitions over the next 12 to 15 months with a significant improvement in the respective segment’s market share and further enhancements to its overall corporate governance structure would also support a rating upgrade.
While CariCris notes that concentration of revenues from BIL and current focus on the Jamaican economy constrains the extent of the credit ratings, CFHL considers that successful execution of its growth and diversification strategies will further evidence the material value creation potential and resilience of the entity. Further evolution of CFHL over time with respect to is governance and institutional arrangements will also enhance its profile.
CFHL underscores the pivotal role of this investment grade rating as recognition of its prudent risk management policies, expansion strategies, and growth initiatives, further solidifying its position as a leading player in the Caribbean financial sector. The company is committed to upholding its strong financial position and continually delivering value to its stakeholders. The positive initial credit ratings from CariCRIS stand as a testament to CFHL’s resolute dedication to sustainable growth and excellence.
With a focus on enhancing operations, diversifying its portfolio, and actively contributing to the economic development of the region, CFHL and its subsidiaries remain steadfast in their pursuit of success.