Caribbean Information and Credit Rating Services Limited (CariCRIS) has affirmed an investment grade credit rating with a stable outlook for Cornerstone Financial Holdings Limited (CFHL), the majority shareholder of Barita Investments Limited (Barita).
This rating independently confirms the company’s financial strength and stability and marks the continued evolution of Cornerstone as a formidable investment holding company in the region, the company said in a release.
CariCRIS initially awarded CFHL with an investment grade rating of jmA (Local Currency Rating) and jmA- (Foreign Currency Rating) on the Jamaica national scale and CariBBB+ (Local Currency Rating) and CariBBB (Foreign Currency Rating) on the regional scale in August of 2023. These ratings have been recently affirmed, with the ratings indicating that CFHL’s level of creditworthiness in relation to other obligors in the Caribbean is adequate and, in relation to other obligors in Jamaica, good. The agency has also assigned a stable outlook to these ratings.
In its release, CariCRIS noted that the stable outlook reflects an expectation of continued profitability over the next 12 to 15 months, primarily driven by fair value gains and dividend income from its major subsidiary, Barita. The outlook is further bolstered by CFHL’s growth initiatives, including expanding operations for Cornerstone United Holdings USA Incorporated (CUH USA) and Cornerstone Financial Holdings Limited USA Incorporated (CFHL USA).
CariCRIS anticipates that CFHL will be well-positioned to meet its debt obligations while maintaining strong capitalization and liquidity. It also recognises the pending acquisition of the Clarien Group and the ongoing reorganization efforts, which will enhance diversification within the group.
The ratings reflect CFHL’s status as an investment holding company associated with one of Jamaica’s established investment banks, with a strong governance structure and robust risk management practices.
According to the CariCRIS release, CFHL’s solid capitalization and liquidity metrics further support the ratings. The release outlines that a credit rating upgrade would become possible with improvements in the credit risk profiles of both the Government of Jamaica and Barita and greater diversification of revenue streams and asset classes following the successful execution of reorganization and acquisition strategies over the next 12 to 15 months.
While CariCRIS highlights that revenue concentration from Barita and the current focus on the Jamaican economy limit the credit ratings, CFHL believes that the effective implementation of its growth and diversification strategies will demonstrate the organization’s substantial value and resilience. Enhancements in governance and institutional arrangements will further strengthen CFHL’s profile over time.
CFHL emphasizes that the affirmation of its investment-grade rating underscores the continuation of its prudent risk management policies, growth strategies, and initiatives, reinforcing its position as a key player in the Caribbean financial landscape.
Chief Investment Officer of the Cornerstone Group, Jason Chambers stated: “Cornerstone is dedicated to maintaining its solid financial standing and consistently delivering value to its stakeholders. The rating affirmation from CariCRIS reflects CFHL’s commitment to sustainable growth and excellence.
With a focus on realizing group-wide operational efficiencies and regional expansion to diversify and optimize our portfolio holdings, CFHL, and its subsidiaries are poised to unlock transformational value aimed at helping to drive Jamaica’s growth and development.”