20 February 2008
CariCRIS assigns “high creditworthiness” ratings for
Eastern Caribbean Home Mortgage Bank
Issue Ratings (For notional debt size of USD 30 million or equivalent)
CariAA (Regional Scale Foreign Currency)
CariAA (Regional Scale Local Currency)
Caribbean Information and Credit Rating Services Limited (CariCRIS), the Caribbean regional credit rating agency, has assigned a rating of CariAA (Foreign Currency Rating) and CariAA (Local Currency Rating) on its Caribbean regional rating scale to the debt issue (notional) of the size of USD 30 million of Eastern Caribbean Home Mortgage Bank (ECHMB). The ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is high.
The ratings on ECHMB reflect the Bank’s low credit risk business model, excellent asset quality and its status as a regional financial institution with support from the Eastern Caribbean Central Bank (ECCB), the premiere financial institution in the Eastern Caribbean Currency Union (ECCU). Also supporting the rating is the highly experienced and qualified management team that is well supported by a reputable Board of Directors. Additionally, ECHMB’s operational and underwriting systems are strong, underpinned by its legislative and operational framework. The ratings are tempered by the challenging market conditions and consistently high liquidity in some key markets contributing to a fair degree of geographic asset concentration. In addition, ECHMB’s resource–raising ability via public bond issues has been somewhat constrained by the simultaneous placements of both corporate and sovereign issues in the ECCU.
CariCRIS’ CEO, Wayne Dass, congratulated the management of ECHMB for not only getting rated but also for deciding to take the rating public. “This bodes well for strengthening and improving transparency in the capital markets and for bond market development. ECHMB’s management must be congratulated for taking this important initiative. Their decision to seek a public rating reflects a high standard of corporate governance and sets an important precedent for other corporates and sovereigns in the OECS and the wider region to follow”.
Commenting on the occasion, Mr. Duleep Cheddie, ECHMB’s CEO said that ECHMB’s mandate is to promote the development of the secondary mortgage market in the member states and bring additional benefits by facilitating the development of the money and capital market, improving liquidity management in the financial system and promoting home ownership throughout the member states. “A high credit rating should have the dual effect of reinforcing ECHMB’s image as an investment of choice in the region and rationalizing pricing on its bond issues.”
About the company: Eastern Caribbean Home Mortgage Bank (ECHMB) was created pursuant to the ECHMB Agreement Act (1995) and commenced operations on April 22nd 1996. Its primary objective is the development of the secondary mortgage market within 8 participating member countries of the Organization of Eastern Caribbean States (OECS) namely Anguilla, Antigua & Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia and St. Vincent and the Grenadines. ECHMB is a privately managed corporation and the current 64 shareholders are strictly financial institutions from the OECS as well as the wider Caribbean. These financial institutions includes the Eastern Caribbean Central Bank (ECCB), commercial banks, social security agencies, insurance companies, mortgage companies, building and loan associations and credit unions. The largest shareholder, the ECCB, holding 25%, is the premiere financial institution in the Eastern Caribbean Currency Union (ECCU).
Please contact CariCRIS for further details of rating rationale on ECHMB
Contacts:
Arjoon Harripaul, Head-Ratings
Tel: 868-627-8879 ext 227, 868-497-4104 (mobile)
Sherry Ann Persad, Rating Analyst
Tel: 868-627-8879 Ext 228
