Caribbean Information & Credit Rating Services Limited - Rating Monitor August 2012

RatingMonitor

CariCRIS R ating Monitor 2

CariCRIS Rating Monitor

CariCRIS Rating Monitor

Features

News from CariCRIS

CariCRIS Rating Rationale Summaries

www.caricris .com

3

4

www.caricris .com

CariCRIS Rating Monitor

Month

Workshop

Location

Oct 2012

Intensive Credit Risk Analysis Workshop (2 days)

Suriname

Nov 2012

Credit Risk Analysis of Insurance Companies & Securities

Trinidad

Companies (1 day) Feb 2013

Financial Ratio Analysis Workshop (2 days)

St. Kitts

Mar 2013

Fundamentals of Financial Risk Management (1 day)

Barbados and Jamaica   www.caricris .com

8

Overview •

• •

We believe the Caribbean sovereigns and some crises-stricken European nations share various vulnerabilities, such as a large government debt overhang, inflexible exchange rate regimes, fiscal imbalances, persistently large external current account deficits, and structural weaknesses.

The comparison of two monetary unions–-EMU and ECCU-–is particularly interesting as we see that both unions share a number of similar structural inefficiencies and policy constraints.

Analysis of how various Caribbean and European sovereigns respond to the adverse shocks presents an opportunity to learn about different policy choices, successes and failures. Drawing on European countries’ experiences could help Caribbean region to minimize its future vulnerabilities.

CariCRIS Rating Monitor

Chart 1 Average Real GDP Growth (2009-2011)

Iceland

Latvia

Greece

Ireland

Portugal

Trinidad & Tobago

Grenada

Belize

Barbados

The Bahamas

Aruba

3 2 1 0 (1) (2) (3) (4) (5)

Jamaica

(%)

©Standard & Poor’s 2012.

Table 1

Foreign Currency Rating: European and Caribbean Peers 2008

2009

2010

2011

2012 through May

Number of notches down from FC ratings in 2008

Aruba

A-

A-

A-

A-

A-

0

Bahamas

A-

BBB+

BBB+

BBB

BBB

2

Barbados

BBB+

BBB

BBB-

BBB-

BBB-

2

Belize

B

B

B

B-

CCC-

4

Jamaica

B

CCC

B-

B-

B-

SD in 2010

Grenada

B-

B-

B-

B-

B-

0 www.caricris .com

9

10

Table 1

Foreign Currency Rating: European and Caribbean Peers (cont.)

2008

2009

2010

2011

2012 through May

Number of notches down from FC ratings in 2008

Trindad & Tobago

A

A

A

A

A

0

Cyrpus

A+

A+

A

BBB

BB+

6

Estonia

A

A-

A

AA-

AA-

(2)

Iceland

BBB-

BBB-

BBB-

BBB-

BBB-

0

Latvia

BBB-

BB

BB+

BB+

BBB-

0

Lithuania

BBB+

BBB

BBB

BBB

BBB

1

Portugal

AA-

A+

A-

BBB-

BB

6

Ireland

AAA

AA

A

BBB+

BBB+

7

Greece

A

BBB+

BB+

CC

CCC

SD in 2012

Ratings reflect end of year rating for each sovereign. See Standard & Poor’s Sovereign Rating & Country T&C Assessment Histories, Rating Direct May 8, 2012 (FC rating updated up to May 19, 2012.)

Chart 2

Labor Unit Cost In Eurpose (Base Year 1999=100) Portugal

Ireland

Greece

Germany

Source: OECD Countries

©Standard & Poor’s 2012.

CariCRIS Rating Monitor

©Standard & Poor’s 2012.

Table 2

Total Factor Productivity And Contribution To GDP Growth For The Median Caribbean Country From 1971 To 2007 Contribution to GDP Growth (%) GDP Growth

Physical Capital

Labor

TFP

1971 - 1980

5

1.9

0.4

2.7

1981 - 1990

5.1

1.4

2.3

1.3

1991 - 2000

3.2

0.8

1.6

0.9

2001 - 2007

3.5

1.9

1.2

0.5

www.caricris .com

11

12

Chart 3

General Government Debt Increase In Percentage Of GDP In Four Years Prior To Crisis (%)

Note: Portugal, Ireland, Greece, Lativia, Cyprus, and Iceland debt increases taken from 2007-2011, Jamaica from 2006-2010, Belize from 2002-2006, Grenada from 2000-2004.

©Standard & Poor’s 2012.

Chart 4

Net General Government Debt, 2011

©Standard & Poor’s 2012.

CariCRIS Rating Monitor

Iceland

Latvia

Greece

Ireland

Portugal

Trinidad & Tobago

Grenada

Jamaica

Belize

Barbados

The Bahamas

Aruba

(%) of GDP

Chart 5

External Financing Needs, 2011 (%) of CAR and usable reserves)

©Standard & Poor’s 2012.

www.caricris .com

13

14

CariCRIS Rating Monitor

www.caricris .com

15

16

CariCRIS Rating Monitor

SME Performance Grading Chart GRADE

DEFINITION

SME 1

Relationship diagram for SME Performance Grading Categories

Industry Risk

DESCRIPTION

Excellent

Displays excellent business and financial performance and has excellent prospects for sustaining this performance

SME 2+

Strong

Displays better than average performance with reasonable prospects for improving its performance

SME 2-

Strong

Displays better than average performance with reasonable prospects for maintaining its performance

SME 3+

Average

Displays average performance with reasonable prospects for improving its performance

SME 3-

Average

Displays average performance with reasonable prospects for maintaining its performance

SME 4

Below Average

SME 5

Weak/ Vulnerable

Displays less than average business and financial performance and has below average prospects for improving or even sustaining its performance Displays weak performance and is highly vulnerable with low prospects for maintaining viability

Management Risk

Business Risk

FINAL PERFORMANCE GRADING

Market Position Operating Efficiency

Financial Risk

www.caricris .com

17

18

CariA CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariACariAAA (+/-) / P1+ C CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / CariP1 P2+ CariP3 CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariACariAAA (+/-) CariA CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / CariP1 P2+ CariP3 / P1+ C (1) A regional scale comparison is more useful and relevant particularly where CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariACariAAA (+/-) the/ region's economies tend /toP3+ be similar economic, and/ P1+ CariP2 / P2+ CariP3CariA CariP1 P1+ CariP2 / P2+ CariP3 CariP4 /inP4+ CariP5 /political P5+ CariP1 CariP1 / P1+ C demographic Cari CariAAA CariA (+/-)structure.

CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariAAA CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / Cari P2+ CariP3CariA (2) ACariA regional is able include(+/-) far more locally and regionally contextual CariAAA (+/-)rating CariBBB (+/-)to CariBB CariB(+/-) CariC(+/-) CariD CariAAA CariACariP1 (+/-) / P1+ C issues can /aP2+ global scale/ P3+ rating.

CariP1 / P1+than CariP2 CariP3 CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / CariAAA P2+ CariP3CariA CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariACariP1 (+/-) / P1+ C CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariP3CariA (3) By focusing on the Caribbean alone, CariCRIS ratings enhance the quality CariAAA Cari CariAAA CariA (+/-) CariBBB (+/-)across CariBBlocal (+/-)and CariB(+/-) CariD CariAAA CariA (+/-) and extent of differentiation regionalCariC(+/-) credits providing the most CariP1 / P1+ C CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 P2+ CariP3 relevant and comprehensive information about regional credits to all investors / Cari CariAAA CariA CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariBBB (+ regional and global.

CariP1 / P1+ C CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariACariAAA (+/-) CariBBB (+ CariA Cari CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariCRIS Rating Monitor

Why a Regional Credit Rating Agency?

www.caricris .com

Caribbean Sovereign Credit Ratings Table

CariCRIS

S&P

Moody’s

Anguilla

CariA- (FC & LC)

-

-

Bahamas

-

BBB/Stable (FC & LC)

A3/Negative (FC & LC)

Barbados

CariAA- (FC) CariAA (LC)

BB+/Stable (FC & LC)

Baa3/Negative (FC & LC)

Belize

-

SD (FC) CCC+/Stable/C (LC)

Ca/Negative (FC) Caa3/Negative (LC)

Grenada

-

B-/Stable (FC & LC)

-

Jamaica

-

B-/Stable (FC & LC)

B3/Stable (FC & LC)

Montserrat

-

BBB-/Stable (FC & LC)

-

Saint Lucia

CariBBB+ (FC & LC)

-

-

-

-

B1/Stable (FC & LC)

CariAAA (FC & LC)

A/Stable (FC & LC)

Baa1/Stable (FC & LC)

Saint Vincent & the Grendadines Trinidad & Tobago

CariCRIS Rating Monitor

CariAAA CariA CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca Cari CariAAA CariA CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca Cari CariAAA CariA CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca CariAAA CariA Cari CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca CariAAA CariA CariP1 / P1+ Ca CariAAA CariA Cari CariP1 / P1+ Ca CariP4 CariAAA CariA CariP1 / P1+ Ca CariP4 CariAAA CariA Cari CariP1 / P1+ Ca CariP4 CariAAA CariA CariP1 / P1+ Ca CariP4 CariAAA CariA Cari CariP1 / P1+ Ca CariP4 CariAAA CariA CariP1 / P1+ Ca CariP4 CariAAA CariBBB (+/-) Cari CariP1 / P1+ Ca CariP4 CariAAA CariA CariP1 / P1+ Ca

(+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca 21 ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca loan or/ line credit /from ariP2 / + P2+ACariP3 P3+ofCariP4 P4+a financial CariP5 /institution P5+ CariP1 / P1+ CariP2

Are you a Micro, Small or Medium Enterprise, seeking....

+ Credit from an international supplier (+/-) CariBBB (+/-) (+/-) + To bid for CariBB a project, or CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 + To improve your business operations for greater efficency profitability (+/-) CariBBB (+/-) and CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca

ariP2 / P2+ CariP3 / P3+ CariP4 / P4+

CariP5 / P5+ CariP1 / P1+ CariP2

Contact CariCRIS now to arrange (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca ariP2 / a P2+ CariP3 / P3+ CariP4 / P4+ business.

CariP5 / P5+ CariP1 / P1+ CariP2 SME Rating for your

(+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca CariCRIS’ SME Ratings are: ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2

+ Very affordable (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) by a comprehensive report on CariC(+/-) your companyCariD CariAAA Ca + Accompanied ariP2 / +P2+Excellent CariP3value / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 for your money A CariA+(+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariA Completed within 3 weeks

ariP2 / P2+ CariP3 / P3+ CariP4 / P4+

CariP5 / P5+ CariP1 / P1+ CariP2

Call or email us to find out more about our SME ratings. (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA Ca Tel: (868)627 8879, Fax: (868)625 8871, Email: info@caricris.com www.caricris .com ariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2

22 Analytical Contacts: Arjoon Harripaul • Tel: 1-868-627-8879 • E-mail: aharripaul@caricris.com Andre Joseph • Tel: 1-868-627-8879 • E-mail: ajoseph@caricris.com.

USD 5 million Debt Issue

CariBBB

(Regional Scale Foreign Currency)

(Notional)

CariBBB+

(Regional Scale Local Currency)

July 2012

jmAA-

(Jamaica National Scale)

CariCRIS Rating Monitor

Loan Profile by Industry as at March 2012 32.7% 25.6%

27.8% 0.9%

Tourism

Agriculture

Services / Distribution & Transportation

Manufacturing

13.1%

Quarry / Mining

!

www.caricris .com

23

24

CariCRIS Rating Monitor

www.caricris .com

25

26  

F Y2011/12*

F Y2010/11

F Y2009/10

F Y2008/09

F Y2007/08

J$ Million Equity Capital Tangible Net Worth^ Total Assets^ Total Revenue Profit After Tax

1,758 9,966 21,956 1,675 692

1,758 9,531 48,481 1,524 724

1,758 9,088 49,239 1,183 316

30 8,796 46,288 1,401 417

30 5,854 45,757 1,587 327

1.1 41.0 2.1 1.0 19.0 40.8 17.1

1.4 29.9 29.9 1.0 12.8 23.1 15.2

4.2

6.2

% Interest Rate Spread Total Expenses/ Total Revenue Net Interest Income/ Average Earning Assets Profit After Tax/ Average Earning Assets Tangible Net Worth/ Adjusted Assets Capital Adequacy Non-Performing Loan/ Total Loans

1.2 33.9 2.2 2.1 45.4 35.5 3.4

0.8 34.6 1.8 1.6 19.7 37.8 4.2

0.8 35.3 1.8 0.7 18.5 35.2 3.1

Times Debt/ Tangible Net Worth

1.2

4.0

4.4

Source: DBJ Annual Reports * Financial Year runs from April 1 to March 31 ^ Tangible Net Worth and Total Assets excludes revaluation reserves, intangibles and the Credit Enhancement Fund

CariCRIS Rating Monitor

Analytical Contacts: Arjoon Harripaul • Tel: 1-868-627-8879 • E-mail: aharripaul@caricris.com Sherry Ann Persad • Tel: 1-868-627-8879 • E-mail: spersad@caricris.com

USD 10 million Debt Issue

CariBBB-

(Regional Scale Foreign Currency)

July 5, 2012

CariBBB-

(Regional Scale Local Currency)

www.caricris .com

27

28

CariCRIS Rating Monitor

Chart 1 Loan Portfolio by Industry for FY2011

24.6%

19.8%

23.5%

23.5% 0.1%

4.5%

4.0%

Education

Mortagage

Tourism

Industrial

Agricultural

Other Consumers

Distribution and Commerce

Source: DAID Bank

www.caricris .com

29

30

CariCRIS Rating Monitor

Chart 2 Non-Performing Loan and Loan Loss Provisions 40 35

% of Gross Loans

30 25 20 15 10 5 0 Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

Mar-12

Financial Year Non-Performing Loans

Loan Loss Provisions

Source: DAID Bank

Chart 3 Rescheduled Loans by Sector for FY2011

Education 41.2%

0.4%

Housing

41.2%

Agriculture

0.4% 3.7% 0.5%

Manufacturing, Services &

Transport

10.6%

Tourism 43.2%

Personal & Other Infrastructure

Source: DAID Bank

www.caricris .com

31

32

9 Mths to March 2011

9 Mths to March 2012

F Y2011*

F Y2010

F Y2009

F Y2008

F Y2007

EC $’000 Total Assets Equity Capital Tangible Net Worth Total Income Operating Expenses (incl. Depreciation) PAT

142,257.3 17,547.6 29,695.5 5,901.0 3,767.5 859.8

182,143.4 47,970.2 61,683.9 6,592.9 4,766.9 386.4

182,081.9 47,970.2 61,160.6 8,266.1 5,169.8 3,060.3

132,538.1 17,547.6 32,566.9 8,636.1 4,818.0 1,205.8

130,652.0 17,547.6 31,222.5 7,064.5 4,063.5 582.7

131,343.5 17,547.6 30,232.3 7,852.5 3,946.8 1,957.3

131,050.1 17,547.6 29,823.4 8,218.5 4,072.5 2,292.2

57.5 0.5 23.6

50.3 1.6 23.0

49.6 1.9 22.8

3.0

3.2

3.3

% Total Expenses/ Total Income PAT/ Average Earning Assets Tangible Net Worth/ Adjusted Assets

63.8 0.7 20.9

72.3 0.3 33.9

62.5 2.0 33.6

55.8 1.0 24.6

Times Debt/ Tangible Net Worth

3.6

Source: DAID Bank Financial Statements *FY - Financial Year runs from July 1st to June 30th

CariCRIS Rating Monitor

1.8

1.9

2.9

Analytical Contacts: Arjoon Harripaul • Tel: 1-868-627-8879 • E-mail: aharripaul@caricris.com Sherry Ann Persad • Tel: 1-868-627-8879 • E-mail: spersad@caricris.com

USD 50 million Debt Issue

CariBBB+ (Regional Scale Foreign Currency)

(Initial Rating)

CariBBB+ (Regional Scale Local Currency)

USD 38 million Debt Issue

CariBBB+ (Regional Scale Foreign Currency)

(Reaffirmed)

CariBBB+ (Regional Scale Local Currency)

April 24, 2012

www.caricris .com

33

34

CariCRIS Rating Monitor

www.caricris .com

35

36

Chart 1 : Balance of Payments Indicators 2007-2011

10 0 2007 % of GDP

2008

2009

2010

2011

-10

-20 -30 -40

Current Account Balance

Year Financial Account Balance

Source: CariCRIS Sovereign Spreads, ECCB Estimates

CariCRIS Rating Monitor

Overall External Balance

Summary Fiscal Performance Highlights FY2007/08 - FY2011/12

Total Revenue Current Revenue Total Recurrent Expenditure Capital Expenditure Total Expenditure

FY2007/08

FY2008/09

FY2009/10

FY2010/11

FY2011/12*

753.1 741.2 663.1 230.7 811.3

829.0 804.9 734.5 208.2 856.8

826.8 759.6 771.4 241.4 925.1

875.9 789.2 833.2 298.6 1,041.0

931.0 838.1 884.9 402.6 1,187.3

5.9 3.9 8.0 23.7 12.5

6.3 6.2 6.2 34.8 14.0

% Change Total Revenue Recurrent Revenue Total Recurrent Expenditure Captial Expenditure Total Expenditure

12.0 13.0 2.6 -20.7 -4.1

10.1 8.6 10.8 -9.8 5.6

-0.3 -5.6 5.0 15.9 8.0

Source: Ministry of Finance, Saint Lucia e: Estimated

Chart 2 : Current Account, Overall Fiscal and Primary Balances FY2007/08-FY2011/12 6.0 4.0 2.0 0.0

% of GDP

-2.0

2007

2008

2009

2010

2011

-4.0 -6.0 -8.0 -10.0

Year Current Account Balance

Overall Fiscal Balance

Primary Balance

Source: CariCRIS Sovereign Spreads, ECCB Estimates www.caricris .com

37

38

CariCRIS Rating Monitor

Selected Economic and Social Indicators 2007-2011 2011

2010

2009

2008

2007

Nominal GDP (US $ mn.)

1,229.6

1,213.2

1,177.5

1,177.9

1,136.8

Nominal GDP Per Capita (US$)

6,939.1,

6,983.5

6,831.0

4,761.9

4,658.5

Real GDP Growth (%)

1.0

0.6

0.3

5.2

2.4

Unemployment Rate (%)

n.a

20.6

20.5

16.8

14.7

Human Development Index

82/187

-

69/182

66/179

72/177

Transparency Int’l Corruption Perception Country Rank

25/183

-

22/180

24/179

na

2011

2010

2009

2008

2007

Central Gov’t Current Revenue

25.4

24.6

24.8

23.7

23.6

Central Gov’t Current Expenditure

23.8

23.2

20.2

18.8

19.4

Central Gov’t Current Balance

1.7

1.4

4.6

4.9

4.2

Central Gov’t Capital Expenditure

12.2

9.3

6.2

5.8

10.0

Central Gov’t Primary Balance

-4.4

-2.0

1.8

2.2

-2.6

Central Gov’t Overall Balance

-7.7

-5.2

-0.8

-0.8

-5.6

Central Gov’t Gross Debt

62.7

55.9

51.6

50.8

52.0

General Gov’t Gross Debt

68.5

62.2

57.7

55.7

56.9

2011

2010

2009

2008

2007

Consumer Price Index (end of period)

4.8

4.2

-3.1

3.8

8.2

Consumer Price Index (annual average)

2.8

3.3

-0.2

8.2

3.1

Credit to the Private Sector & NFPE (% of GDP)

120.9

121.3

130.0

130.4

124.3

Credit to the Private Sector & NFPE (YOY change %)

2.4

1.2

2.2

10.0

25.9

Non-Performing Loans/ Total Loans (%)

13.2

12.4

7.9

6.6

5.8

Provision for NPL (% of NPL)

36.2

23.2

31.4

37.5

45.5

Banking Sector Capital Adequacy Ratio (%)

19.0

18.6

18.3

17.5

20.4

Base Money (YOY change)

1.5

9.8

10.2

3.1

7.6

Broad Money or Money Supply (YOY change %)

6.7

1.9

1.3

6.7

6.8

Average Bank Deposit Rate (%)

3.1

3.3

3.1

3.2

3.1

Average Bank Lending Rate (%)

9.0

9.5

9.7

9.6

8.8

Interest Rate Spread

6.0

6.2

6.6

6.4

5.8

Nominal Exchange Rates (per US $)

2.7

2.7

2.7

2.7

2.7

Real Effective Exchange Rates (YOY change %)

-1.1

-0.4

3.8

4.3

-3.4

2011

2010

2009

2008

2007

Current Account Balance (% of GDP)

-15.4

-14.4

-11.9

-29.4

-30.3

Capital & Financial Account Balance (% of GDP)

17.8

17.0

14.7

28.5

31.9

Overall External Balance (% of GDP)

2.4

2.6

2.6

-0.9

1.6

External Public Debt (% of GDP)

33.9

32.5

32.5

30.9

35.5

Gross International Reserves (US $ mn.)

305.5

307.0

307.0

258.4

304.6

Net International Reserves (US $ mn.)

64.4

97.5

97.5

11.0

103.6

Gross International Reserves (in months of imports)

4.7

4.7

4.7

4.0

5.0

Total Debt Service (% of exports of GNFS)

11.6

10.7

10.7

11.3

14.6

Gross Financing Requirements/ Reserves (%)

70.8

72.4

72.4

143.9

119.2

Income & Economic Structure

Fiscal Accounts (% of GDP)

Monetary, Financial & Exchange Rate Indicators

External Sector Indicators

www.caricris .com

39

40 Analytical Contacts: Arjoon Harripaul • Tel: 1-868-627-8879 • E-mail: aharripaul@caricris.com Kathryn Budhooram • Tel: 1-868-627-8879 • E-mail: kbudhooram@caricris.com

USD 10 million Debt Issue

CariA+ (Regional Scale Foreign Currency)

(Notional)

CariA+ (Regional Scale Local Currency)

July 2012

ttA+

(Trinidad and Tobago National Scale)

Chart 1: Contribution to Revenue by Business Division for 2011

17.1% 42.6%

13.4%

3.2% PPE Engineering Services Industrial Sales

3.5%

6.0%

EIA Upstream Energy Testing & Inspection

Source: TOSL’s 2011 Audited Financial Statements

CariCRIS Rating Monitor

14.2%

Safety Sales

www.caricris .com

41

42

Times

Times

Chart 2: Gearing and Interest Cover

0.8

20

0.7

18 16

0.6

14

0.5

12

0.4

10

0.3

8 6

0.2

4

0.1

2 0

0.0

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

Financial Year Debt / Equity

CariCRIS Rating Monitor

Interest Cover

FY2011

www.caricris .com

43

44  

2011*

2010

2009

2008^

F Y2007

TT$ Million Operating Revenue EBITDA PAT Net Cash Accruals Equity Share Capital Tangible Net Worth

243.1 46.9 26.7 30.9 29.6 145.6

243.5 45.2 18.8 23.4 29.6 122.6

199.8 31.8 13 17.2 29.6 110.9

366.8 66.2 41.1 43.3 29.6 101.2

207.4 23.3 16.2 15.6 29.6 55.6

40 17.9 11.1 43.9

26.5 11.1 7.8 22

5.7 0.7 0.6 (0.2) 2.3

6.5 0.4 0.8 0.9 1.6

% Gross Profit Margin EBITDA Margin PAT Margin ROCE

42.5 19.1 10.9 23.3

38.1 18.5 7.7 20.1

38 15.8 6.5 14.3

Times Interest Cover Net Cash Accurals/ Total Debt Total Debt/ Tangible Net Worth DSCR Current Ration

18.7 1 0.2 1.7 2.7

9.5 0.6 0.3 1.2 2.4

4.8 0.3 0.6 0.8 2

Source: TOSL Audited Financial Statements ^ 22 Months to December 2008 as a result of a change in the financial year end to December from February * Financial Year runs from January-December

CariCRIS Rating Monitor

Entity

Issue

Ratings

1

The National Gas Company of Trinidad and Tobago

USD 400 Million Debt Issue

CariAAA (Regional Scale Foreign Currency) CariAAA (Regional Scale Local Currency) ttAAA (Trinidad & Tobago National Scale)

2

Phoenix Park Gas Processors Limited

USD 185 Million Debt Issue

CariAAA (Regional Scale Foreign Currency) CariAAA (Regional Scale Local Currency) ttAAA (Trinidad & Tobago National Scale)

3

Goddard Enterprises Limited

USD 16 Million Debt Issue (Notional)

CariAACariAA bbAA

4

St. Lucia Electricity Services Limited

USD 15 Million Debt Issue (Notional)

CariBBB (Regional Scale Foreign Currency) CariBBB (Regional Scale Local Currency)

5

Government of the Republic of Trinidad and Tobago

USD 500 Million Debt Issue (Notional)

CariAAA (Regional Scale Foreign Currency) CariAAA (Regional Scale Local Currency) ttAAA (Trinidad & Tobago National Scale)

6

Government of Barbados

USD 300 Million Debt Issue (Notional)

CariAACariAA

(Regional Scale Foreign Currency) (Regional Scale Local Currency)

7

Government of Anguilla

USD 25 Million Debt Issue (Notional)

CariACariA-

(Regional Scale Foreign Currency) (Regional Scale Local Currency)

8

Pan Caribbean Financial Services Limited

USD 25 Million Debt Issue (Notional)

CariBBB- (Regional Scale Foreign Currency) CariBBB (Regional Scale Local Currency) jmA+ (Jamaica National Scale)

9

Republic Bank Limited

TTD 1 Billion Debt Issue

CariAA+ (Regional Scale Foreign Currency) CariAA+ (Regional Scale Local Currency) ttAA+ (Trinidad & Tobago National Scale)

10

Eastern Caribbean Home Mortgage Bank

USD 30 Million Debt Issue (Notional)

CariAACariAA-

11

NCB Capital Markets Limited

USD 25 Million Debt Issue (Notional)

CariBBB- (Regional Scale Foreign Currency) CariBBB (Regional Scale Local Currency) jmA+ (Jamaica National Scale)

12

National Commercial Bank Jamaica Limited

USD 75 Million Debt Issue (Notional)

CariBBB (Regional Scale Foreign Currency) CariBBB+ (Regional Scale Local Currency) jmAA(Jamaica National Scale)

13

Sagicor Life Jamaica Limited

USD 75 Million Debt Issue (Notional)

jmAAA

14

Government of Saint Lucia

USD 38 Million Debt Issue (Notional)

CariBBB+ (Regional Scale Foreign Currency) CariBBB+ (Regional Scale Local Currency)

15

TOSL Engineering Limited

USD 10 Million Debt Issue (Notional)

CariA+ CariA+

16

Dominica Agricultural, Industrial & Development Bank

USD 10 Million Debt Issue (Notional)

CariBBB- (Regional Scale Foreign Currency) CariBBB- (Regional Scale Local Currency)

17

Development Bank of Jamaica

USD 5 Million Debt Issue (Notional)

CariBBB (Regional Scale Foreign Currency) CariBBB+ (Regional Scale Local Currency) jmAA(Jamaica National Scale)

18

Government of the Commonwealth of Dominica

USD 25 Million Debt Issue (Notional)

CariBBB- (Regional Scale Foreign Currency) CariBBB- (Regional Scale Local Currency)

(Regional Scale Foreign Currency) (Regional Scale Local Currency) (Barbados National Scale)

(Regional Scale Foreign Currency) (Regional Scale Local Currency)

(Jamaica National Scale)

(Regional Scale Foreign Currency) (Regional Scale Local Currency)

w w w. caricris . com

45

Cari Cari 46

Regional

National

Definition

Regional

National

Definition

CariAAA

**AAA

Highest

CariP1 / P1+

**P1 / P1+

Highest

CariAA (+/-)

**AA (+/-)

High

CariP2 / P2+

**P2 / P2+

High

CariA (+/-)

**A (+/-)

Good

CariP3 / P3+

**P3 / P3+

Average

CariBBB (+/-)

**BBB (+/-)

Adequate

CariP4 / P4+

**P4 / P4+

Below Average

CariBB (+/-)

**BB (+/-)

Below Average

CariP5 / P5+

**P5 / P5+

Default

CariB (+/-)

**B (+/-)

Weak

CariC(+/-)

**C(+/-)

Poor

CariD

**D

Default

Definitions Regional scale ratings use the listed rating symbols with the prefix ‘Cari’ while national scale ratings use the above symbols with the prefix applicable for the respective national scale – ‘bb’ for the Barbados national scale, ‘jm’ for the Jamaica national scale and ‘tt’ for the Trinidad and Tobago national scale.

The long-term rating scale is used for debt instruments with original tenure of more than 1 year, whereas the short-term ratings scale is used for commercial paper or debt instruments with tenure of less than 1 year.

REGIONAL RATING SCALE : The rating indicates that the level of creditworthiness of an obligation/obligor adjudged in relation to other obligations/obligors in the Caribbean* is…. (as per the table).

NATIONAL RATING SCALE: The rating indicates that the level of creditworthiness of an obligation/obligor adjudged in relation to other obligations/obligors in [country name] (e.g. Jamaica) is… (as per the table above). * The term Caribbean as used here covers the following countries: Bahamas,

Barbados, Belize, Costa Rica, Dominican Republic, Guyana, Haiti, Jamaica, Panama, Suriname, Trinidad and Tobago and the following countries in the OECS – Anguilla, Antigua & Barbuda, Dominica, Grenada, Montserrat, St. Kitts & Nevis, Saint Lucia and St. Vincent & the Grenadines.

Cari Cari Cari Cari / P2 P2+ Cari P1+ P1+ Cari P2+ Cari Cari

(+/-

P4+ Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca Ca A( Ca Ca Ca Ca Ca Ca

iAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ iP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-)

iD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ Cari 47 iAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) Ca iP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA CariA (+/-) CariBBB (+ iC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 2+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariA (+ + CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA CariA (+/-) CariB iB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4 + CariP2 / P2+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariA + CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA Ca iBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P3 + CariP3 /CariP4 / P4+ CariP5 A (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ Car iP2 / P2+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD CariAAA C iP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA CariA (+

CariA (+/-) CariP1 / P1+ CariP2 / P2+ Car + CariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA CariA (+/-) CariBBB ariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+ ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD ariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD ariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD ariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 ari ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD Alignment with best practices in / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 ariP1 / +P1+ CariP2 / P2+ CariP3 International capital markets. ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD ariP1 / +P1+ CariP2 / P2+ CariP3 Increased access to funding and / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 increased visibility with (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD ariAAA CariA (+/-) CariBBB international ariP1 / P1+ CariP2 investors. / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD ari + Cost benefits: Reduced cost of ariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ CariP1 borrowings. ariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) CariC(+/-) CariD Increased financial discipline and/ P3+ CariP1 / P1+ CariP2 / P2+ CariP3 / ariP1 / +P1+ CariP2 / P2+ CariP3 an independent diagnostic (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ CariP5 / P5+ analysis. ariP2 / P2+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) CariB(+/-) Ca ariAAA+ CariA (+/-)toCariP1 P1+ Opportunity contribute/ to the CariP2 / P2+ CariP3 / P3+ CariP4 / P4+ ari ariP1 / P1+ CariP2 /ofP2+ CariAAA CariA (+/-) CariBBB (+/-) CariBB (+/-) development the region’s ariC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+ CariP3 / P capital markets. ariP5 / P5+ CariP1 / P1+ CariP2 / P2+ CariAAA CariA (+/-) CariBBB (+/-) + An ideal pre-cursor to an ariB(+/-) CariC(+/-) CariD CariAAA CariA (+/-) CariP1 / P1+ CariP2 / P2+

-) CariB(+/-) CariC(+/-) CariD CariAAA

Regional Credit Rating

ADVANTAGES

International rating.

Call or email us to find out more about our products and services.

Tel: (868)627 8879, Fax: (868)625 8871, Email: info@caricris.com

www.caricris .com